Correlation Between FLOW TRADERS and POLAR POWER
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and POLAR POWER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and POLAR POWER INC, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of POLAR POWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and POLAR POWER.
Diversification Opportunities for FLOW TRADERS and POLAR POWER
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FLOW and POLAR is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and POLAR POWER INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POLAR POWER INC and FLOW TRADERS 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 FLOW TRADERS LTD 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 INC has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and POLAR POWER go up and down completely randomly.
Pair Corralation between FLOW TRADERS and POLAR POWER
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.29 times more return on investment than POLAR POWER. However, FLOW TRADERS LTD is 3.49 times less risky than POLAR POWER. It trades about 0.02 of its potential returns per unit of risk. POLAR POWER INC is currently generating about 0.0 per unit of risk. If you would invest 2,096 in FLOW TRADERS LTD on September 24, 2024 and sell it today you would earn a total of 118.00 from holding FLOW TRADERS LTD or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. POLAR POWER INC
Performance |
| Timeline |
| FLOW TRADERS LTD |
| POLAR POWER INC |
FLOW TRADERS and POLAR POWER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and POLAR POWER
The main advantage of trading using opposite FLOW TRADERS and POLAR POWER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. The Charles Schwab | FLOW TRADERS vs. The Goldman Sachs |
| POLAR POWER vs. Fast Retailing Co | POLAR POWER vs. Chunghwa Telecom Co | POLAR POWER vs. FLOW TRADERS LTD | POLAR POWER vs. CITIC Telecom International |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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