Correlation Between Eugene Technology and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Eugene Technology 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 Eugene Technology and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eugene Technology CoLtd and Polaris Office Corp, you can compare the effects of market volatilities on Eugene Technology 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 Eugene Technology with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eugene Technology and Polaris Office.
Diversification Opportunities for Eugene Technology and Polaris Office
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eugene and Polaris is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Eugene Technology CoLtd 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 Eugene Technology 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 Eugene Technology CoLtd 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 Eugene Technology i.e., Eugene Technology and Polaris Office go up and down completely randomly.
Pair Corralation between Eugene Technology and Polaris Office
Assuming the 90 days trading horizon Eugene Technology is expected to generate 3.79 times less return on investment than Polaris Office. But when comparing it to its historical volatility, Eugene Technology CoLtd is 1.84 times less risky than Polaris Office. It trades about 0.04 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 153,000 in Polaris Office Corp on September 2, 2024 and sell it today you would earn a total of 500,000 from holding Polaris Office Corp or generate 326.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eugene Technology CoLtd vs. Polaris Office Corp
Performance |
| Timeline |
| Eugene Technology CoLtd |
| Polaris Office Corp |
Eugene Technology and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eugene Technology and Polaris Office
The main advantage of trading using opposite Eugene Technology and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eugene Technology 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.| Eugene Technology vs. Korea Investment Holdings | Eugene Technology vs. PLAYWITH | Eugene Technology vs. DB Financial Investment | Eugene Technology vs. LB Investment |
| Polaris Office vs. LG Household Healthcare | Polaris Office vs. SCI Information Service | Polaris Office vs. Korea Alcohol Industrial | Polaris Office vs. Dongbang Transport Logistics |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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