Correlation Between Polar Power and Signify NV
Can any of the company-specific risk be diversified away by investing in both Polar Power and Signify NV 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 Signify NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Power and Signify NV, you can compare the effects of market volatilities on Polar Power and Signify NV 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 Signify NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Power and Signify NV.
Diversification Opportunities for Polar Power and Signify NV
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Polar and Signify is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Polar Power and Signify NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signify NV 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 Signify NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signify NV has no effect on the direction of Polar Power i.e., Polar Power and Signify NV go up and down completely randomly.
Pair Corralation between Polar Power and Signify NV
Given the investment horizon of 90 days Polar Power is expected to generate 3.0 times more return on investment than Signify NV. However, Polar Power is 3.0 times more volatile than Signify NV. It trades about 0.03 of its potential returns per unit of risk. Signify NV is currently generating about -0.06 per unit of risk. If you would invest 266.00 in Polar Power on November 5, 2024 and sell it today you would earn a total of 14.00 from holding Polar Power or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.62% |
| Values | Daily Returns |
Polar Power vs. Signify NV
Performance |
| Timeline |
| Polar Power |
| Signify NV |
Polar Power and Signify NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Power and Signify NV
The main advantage of trading using opposite Polar Power and Signify NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Power position performs unexpectedly, Signify NV 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 Signify NV will offset losses from the drop in Signify NV's long position.| Polar Power vs. CBAK Energy Technology | Polar Power vs. Ocean Power Technologies | Polar Power vs. Enersys | Polar Power vs. Flux Power Holdings |
| Signify NV vs. Legrand SA ADR | Signify NV vs. Energizer Holdings | Signify NV vs. Polar Power | Signify NV vs. Ocean Power 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 Stocks Directory module to find actively traded stocks across global markets.
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