Correlation Between Schibsted ASA and Polaris Media
Can any of the company-specific risk be diversified away by investing in both Schibsted ASA 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 Schibsted ASA and Polaris Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schibsted ASA B and Polaris Media, you can compare the effects of market volatilities on Schibsted ASA 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 Schibsted ASA with a short position of Polaris Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schibsted ASA and Polaris Media.
Diversification Opportunities for Schibsted ASA and Polaris Media
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Schibsted and Polaris is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Schibsted ASA B and Polaris Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Media and Schibsted ASA 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 Schibsted ASA B 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 Schibsted ASA i.e., Schibsted ASA and Polaris Media go up and down completely randomly.
Pair Corralation between Schibsted ASA and Polaris Media
Assuming the 90 days trading horizon Schibsted ASA is expected to generate 1.48 times less return on investment than Polaris Media. But when comparing it to its historical volatility, Schibsted ASA B is 2.08 times less risky than Polaris Media. It trades about 0.2 of its potential returns per unit of risk. Polaris Media is currently generating about 0.14 of returns per unit of risk over similar time horizon. 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schibsted ASA B vs. Polaris Media
Performance |
| Timeline |
| Schibsted ASA B |
| Polaris Media |
Schibsted ASA and Polaris Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schibsted ASA and Polaris Media
The main advantage of trading using opposite Schibsted ASA and Polaris Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schibsted ASA 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.| Schibsted ASA vs. Kid ASA | Schibsted ASA vs. Kitron ASA | Schibsted ASA vs. Olav Thon Eien | Schibsted ASA vs. Elkem ASA |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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