Correlation Between Polaris Media and Techstep ASA
Can any of the company-specific risk be diversified away by investing in both Polaris Media and Techstep ASA 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 Polaris Media and Techstep ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polaris Media and Techstep ASA, you can compare the effects of market volatilities on Polaris Media and Techstep ASA 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 Polaris Media with a short position of Techstep ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polaris Media and Techstep ASA.
Diversification Opportunities for Polaris Media and Techstep ASA
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Polaris and Techstep is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Polaris Media and Techstep ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Techstep ASA and Polaris Media 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 Polaris Media are associated (or correlated) with Techstep ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Techstep ASA has no effect on the direction of Polaris Media i.e., Polaris Media and Techstep ASA go up and down completely randomly.
Pair Corralation between Polaris Media and Techstep ASA
Assuming the 90 days trading horizon Polaris Media is expected to generate 0.86 times more return on investment than Techstep ASA. However, Polaris Media is 1.17 times less risky than Techstep ASA. It trades about 0.11 of its potential returns per unit of risk. Techstep ASA is currently generating about 0.02 per unit of risk. If you would invest 7,200 in Polaris Media on September 3, 2024 and sell it today you would earn a total of 1,300 from holding Polaris Media or generate 18.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polaris Media vs. Techstep ASA
Performance |
| Timeline |
| Polaris Media |
| Techstep ASA |
Polaris Media and Techstep ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polaris Media and Techstep ASA
The main advantage of trading using opposite Polaris Media and Techstep ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polaris Media position performs unexpectedly, Techstep ASA 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 Techstep ASA will offset losses from the drop in Techstep ASA's long position.| Polaris Media vs. Kid ASA | Polaris Media vs. Byggma | Polaris Media vs. American Shipping | Polaris Media vs. Kitron ASA |
| Techstep ASA vs. Next Biometrics Group | Techstep ASA vs. Goodtech | Techstep ASA vs. Elkem ASA | Techstep ASA vs. Integrated Wind Solutions |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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