Correlation Between Polaris Office and Jb Financial
Can any of the company-specific risk be diversified away by investing in both Polaris Office and Jb Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Polaris Office and Jb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polaris Office Corp and Jb Financial, you can compare the effects of market volatilities on Polaris Office and Jb Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Polaris Office with a short position of Jb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and Jb Financial.
Diversification Opportunities for Polaris Office and Jb Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polaris and 175330 is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and Jb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jb Financial and Polaris Office is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Polaris Office Corp are associated (or correlated) with Jb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jb Financial has no effect on the direction of Polaris Office i.e., Polaris Office and Jb Financial go up and down completely randomly.
Pair Corralation between Polaris Office and Jb Financial
Assuming the 90 days trading horizon Polaris Office Corp is expected to under-perform the Jb Financial. In addition to that, Polaris Office is 2.09 times more volatile than Jb Financial. It trades about -0.02 of its total potential returns per unit of risk. Jb Financial is currently generating about 0.14 per unit of volatility. If you would invest 1,412,909 in Jb Financial on August 30, 2024 and sell it today you would earn a total of 581,091 from holding Jb Financial or generate 41.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Office Corp vs. Jb Financial
Performance |
| Timeline |
| Polaris Office Corp |
| Jb Financial |
Polaris Office and Jb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and Jb Financial
The main advantage of trading using opposite Polaris Office and Jb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, Jb Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Jb Financial will offset losses from the drop in Jb Financial's long position.| Polaris Office vs. Daou Data Corp | Polaris Office vs. Busan Industrial Co | Polaris Office vs. Busan Ind | Polaris Office vs. Shinhan WTI Futures |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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