Correlation Between EV Advanced and Polaris Office
Can any of the company-specific risk be diversified away by investing in both EV Advanced 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 EV Advanced and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EV Advanced Material and Polaris Office Corp, you can compare the effects of market volatilities on EV Advanced 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 EV Advanced with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of EV Advanced and Polaris Office.
Diversification Opportunities for EV Advanced and Polaris Office
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 131400 and Polaris is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material 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 EV Advanced 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 EV Advanced Material 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 EV Advanced i.e., EV Advanced and Polaris Office go up and down completely randomly.
Pair Corralation between EV Advanced and Polaris Office
Assuming the 90 days trading horizon EV Advanced Material is expected to under-perform the Polaris Office. But the stock apears to be less risky and, when comparing its historical volatility, EV Advanced Material is 1.2 times less risky than Polaris Office. The stock trades about -0.03 of its potential returns per unit of risk. The Polaris Office Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 852,000 in Polaris Office Corp on October 18, 2024 and sell it today you would lose (273,000) from holding Polaris Office Corp or give up 32.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EV Advanced Material vs. Polaris Office Corp
Performance |
| Timeline |
| EV Advanced Material |
| Polaris Office Corp |
EV Advanced and Polaris Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EV Advanced and Polaris Office
The main advantage of trading using opposite EV Advanced and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced 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.| EV Advanced vs. Samyung Trading Co | EV Advanced vs. Atinum Investment Co | EV Advanced vs. Korea Investment Holdings | EV Advanced vs. LB Investment |
| Polaris Office vs. Pyung Hwa Industrial | Polaris Office vs. EV Advanced Material | Polaris Office vs. Kolon Plastics | Polaris Office vs. Ssangyong Materials Corp |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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