Correlation Between KT Submarine and Polaris Office
Can any of the company-specific risk be diversified away by investing in both KT Submarine and Polaris Office 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 KT Submarine and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Submarine Telecom and Polaris Office Corp, you can compare the effects of market volatilities on KT Submarine and Polaris Office 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 KT Submarine with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and Polaris Office.
Diversification Opportunities for KT Submarine and Polaris Office
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 060370 and Polaris is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Telecom and Polaris Office Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Office Corp and KT Submarine 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 KT Submarine Telecom are associated (or correlated) with Polaris Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Office Corp has no effect on the direction of KT Submarine i.e., KT Submarine and Polaris Office go up and down completely randomly.
Pair Corralation between KT Submarine and Polaris Office
Assuming the 90 days trading horizon KT Submarine Telecom is expected to under-perform the Polaris Office. But the stock apears to be less risky and, when comparing its historical volatility, KT Submarine Telecom is 1.12 times less risky than Polaris Office. The stock trades about -0.01 of its potential returns per unit of risk. The Polaris Office Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 600,000 in Polaris Office Corp on December 1, 2024 and sell it today you would earn a total of 5,000 from holding Polaris Office Corp or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KT Submarine Telecom vs. Polaris Office Corp
Performance |
| Timeline |
| KT Submarine Telecom |
| Polaris Office Corp |
KT Submarine and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and Polaris Office
The main advantage of trading using opposite KT Submarine and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine position performs unexpectedly, Polaris Office 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 Polaris Office will offset losses from the drop in Polaris Office's long position.| KT Submarine vs. Ssangyong Information Communication | KT Submarine vs. Innowireless Co | KT Submarine vs. Daishin Information Communications | KT Submarine vs. Barunson Entertainment Arts |
| Polaris Office vs. KakaoBank Corp | Polaris Office vs. InfoBank | Polaris Office vs. Alton Sports CoLtd | Polaris Office vs. Incar Financial Service |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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