Correlation Between Sungwoo Electronics and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Sungwoo Electronics 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 Sungwoo Electronics and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungwoo Electronics Co and Polaris Office Corp, you can compare the effects of market volatilities on Sungwoo Electronics 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 Sungwoo Electronics with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungwoo Electronics and Polaris Office.
Diversification Opportunities for Sungwoo Electronics and Polaris Office
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sungwoo and Polaris is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sungwoo Electronics Co 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 Sungwoo Electronics 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 Sungwoo Electronics Co 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 Sungwoo Electronics i.e., Sungwoo Electronics and Polaris Office go up and down completely randomly.
Pair Corralation between Sungwoo Electronics and Polaris Office
Assuming the 90 days trading horizon Sungwoo Electronics is expected to generate 5.6 times less return on investment than Polaris Office. But when comparing it to its historical volatility, Sungwoo Electronics Co is 2.3 times less risky than Polaris Office. It trades about 0.03 of its potential returns per unit of risk. Polaris Office Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 205,500 in Polaris Office Corp on August 31, 2024 and sell it today you would earn a total of 444,500 from holding Polaris Office Corp or generate 216.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.98% |
| Values | Daily Returns |
Sungwoo Electronics Co vs. Polaris Office Corp
Performance |
| Timeline |
| Sungwoo Electronics |
| Polaris Office Corp |
Sungwoo Electronics and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungwoo Electronics and Polaris Office
The main advantage of trading using opposite Sungwoo Electronics and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungwoo Electronics 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.| Sungwoo Electronics vs. AptaBio Therapeutics | Sungwoo Electronics vs. Daewoo SBI SPAC | Sungwoo Electronics vs. Dream Security co | Sungwoo Electronics vs. Microfriend |
| Polaris Office vs. Eagle Veterinary Technology | Polaris Office vs. AurosTechnology | Polaris Office vs. Insung Information Co | Polaris Office vs. Eugene Technology CoLtd |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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