Correlation Between Prosafe SE and Polaris Media
Can any of the company-specific risk be diversified away by investing in both Prosafe SE and Polaris Media 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 Prosafe SE and Polaris Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prosafe SE and Polaris Media, you can compare the effects of market volatilities on Prosafe SE and Polaris Media 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 Prosafe SE with a short position of Polaris Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and Polaris Media.
Diversification Opportunities for Prosafe SE and Polaris Media
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prosafe and Polaris is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE and Polaris Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Media and Prosafe SE 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 Prosafe SE are associated (or correlated) with Polaris Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Media has no effect on the direction of Prosafe SE i.e., Prosafe SE and Polaris Media go up and down completely randomly.
Pair Corralation between Prosafe SE and Polaris Media
Assuming the 90 days trading horizon Prosafe SE is expected to under-perform the Polaris Media. In addition to that, Prosafe SE is 1.71 times more volatile than Polaris Media. It trades about -0.52 of its total potential returns per unit of risk. Polaris Media is currently generating about 0.14 per unit of volatility. If you would invest 7,700 in Polaris Media on August 25, 2024 and sell it today you would earn a total of 900.00 from holding Polaris Media or generate 11.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prosafe SE vs. Polaris Media
Performance |
| Timeline |
| Prosafe SE |
| Polaris Media |
Prosafe SE and Polaris Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prosafe SE and Polaris Media
The main advantage of trading using opposite Prosafe SE and Polaris Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE position performs unexpectedly, Polaris Media 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 Polaris Media will offset losses from the drop in Polaris Media's long position.The idea behind Prosafe SE and Polaris Media pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Polaris Media vs. Kid ASA | Polaris Media vs. Byggma | Polaris Media vs. American Shipping | Polaris Media vs. Kitron ASA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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