Correlation Between Polar Power and Energizer Holdings
Can any of the company-specific risk be diversified away by investing in both Polar Power and Energizer Holdings 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 Polar Power and Energizer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Power and Energizer Holdings, you can compare the effects of market volatilities on Polar Power and Energizer Holdings 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 Polar Power with a short position of Energizer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Power and Energizer Holdings.
Diversification Opportunities for Polar Power and Energizer Holdings
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polar and Energizer is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Polar Power and Energizer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energizer Holdings and Polar 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 Polar Power are associated (or correlated) with Energizer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energizer Holdings has no effect on the direction of Polar Power i.e., Polar Power and Energizer Holdings go up and down completely randomly.
Pair Corralation between Polar Power and Energizer Holdings
Given the investment horizon of 90 days Polar Power is expected to under-perform the Energizer Holdings. In addition to that, Polar Power is 2.94 times more volatile than Energizer Holdings. It trades about -0.04 of its total potential returns per unit of risk. Energizer Holdings is currently generating about 0.2 per unit of volatility. If you would invest 3,352 in Energizer Holdings on September 13, 2024 and sell it today you would earn a total of 334.50 from holding Energizer Holdings or generate 9.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Power vs. Energizer Holdings
Performance |
| Timeline |
| Polar Power |
| Energizer Holdings |
Polar Power and Energizer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Power and Energizer Holdings
The main advantage of trading using opposite Polar Power and Energizer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Power position performs unexpectedly, Energizer Holdings 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 Energizer Holdings will offset losses from the drop in Energizer Holdings' long position.| Polar Power vs. CBAK Energy Technology | Polar Power vs. Ocean Power Technologies | Polar Power vs. Enersys | Polar Power vs. Flux Power Holdings |
| Energizer Holdings vs. H B Fuller | Energizer Holdings vs. Minerals Technologies | Energizer Holdings vs. Quaker Chemical | Energizer Holdings vs. Sensient Technologies |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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