Correlation Between Flux Power and Polar Power
Can any of the company-specific risk be diversified away by investing in both Flux Power and Polar Power 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 Flux Power and Polar Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flux Power Holdings and Polar Power, you can compare the effects of market volatilities on Flux Power and Polar Power 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 Flux Power with a short position of Polar Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flux Power and Polar Power.
Diversification Opportunities for Flux Power and Polar Power
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flux and Polar is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Flux Power Holdings and Polar Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Power and Flux Power 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 Flux Power Holdings are associated (or correlated) with Polar Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Power has no effect on the direction of Flux Power i.e., Flux Power and Polar Power go up and down completely randomly.
Pair Corralation between Flux Power and Polar Power
Given the investment horizon of 90 days Flux Power Holdings is expected to under-perform the Polar Power. But the stock apears to be less risky and, when comparing its historical volatility, Flux Power Holdings is 1.44 times less risky than Polar Power. The stock trades about -0.29 of its potential returns per unit of risk. The Polar Power is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 304.00 in Polar Power on August 28, 2024 and sell it today you would earn a total of 26.00 from holding Polar Power or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Flux Power Holdings vs. Polar Power
Performance |
| Timeline |
| Flux Power Holdings |
| Polar Power |
Flux Power and Polar Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flux Power and Polar Power
The main advantage of trading using opposite Flux Power and Polar Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flux Power position performs unexpectedly, Polar Power 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 Polar Power will offset losses from the drop in Polar Power's long position.| Flux Power vs. Bloom Energy Corp | Flux Power vs. Eos Energy Enterprises | Flux Power vs. Sunrise New Energy | Flux Power vs. GrafTech International |
| Polar Power vs. CBAK Energy Technology | Polar Power vs. Ocean Power Technologies | Polar Power vs. Enersys | Polar Power vs. Flux Power Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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