Correlation Between Polaris Office and LG Energy
Can any of the company-specific risk be diversified away by investing in both Polaris Office and LG Energy 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 LG Energy 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 LG Energy Solution, you can compare the effects of market volatilities on Polaris Office and LG Energy 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 LG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Office and LG Energy.
Diversification Opportunities for Polaris Office and LG Energy
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polaris and 373220 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Office Corp and LG Energy Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Energy Solution 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 LG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Energy Solution has no effect on the direction of Polaris Office i.e., Polaris Office and LG Energy go up and down completely randomly.
Pair Corralation between Polaris Office and LG Energy
Assuming the 90 days trading horizon Polaris Office Corp is expected to generate 2.4 times more return on investment than LG Energy. However, Polaris Office is 2.4 times more volatile than LG Energy Solution. It trades about 0.08 of its potential returns per unit of risk. LG Energy Solution is currently generating about -0.01 per unit of risk. If you would invest 146,200 in Polaris Office Corp on October 12, 2024 and sell it today you would earn a total of 439,800 from holding Polaris Office Corp or generate 300.82% 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. LG Energy Solution
Performance |
| Timeline |
| Polaris Office Corp |
| LG Energy Solution |
Polaris Office and LG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Office and LG Energy
The main advantage of trading using opposite Polaris Office and LG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Office position performs unexpectedly, LG Energy 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 LG Energy will offset losses from the drop in LG Energy's long position.| Polaris Office vs. Nable Communications | Polaris Office vs. Korea Air Svc | Polaris Office vs. Digital Power Communications | Polaris Office vs. Cloud Air CoLtd |
| LG Energy vs. Polaris Office Corp | LG Energy vs. Kukdong Oil Chemicals | LG Energy vs. Clean Science co | LG Energy vs. Namhae Chemical |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |