Correlation Between VivoPower International and Polar Power
Can any of the company-specific risk be diversified away by investing in both VivoPower International and Polar Power 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 VivoPower International and Polar Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VivoPower International PLC and Polar Power, you can compare the effects of market volatilities on VivoPower International and Polar Power 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 VivoPower International with a short position of Polar Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of VivoPower International and Polar Power.
Diversification Opportunities for VivoPower International and Polar Power
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between VivoPower and Polar is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding VivoPower International PLC and Polar Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Power and VivoPower International 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 VivoPower International PLC are associated (or correlated) with Polar Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Power has no effect on the direction of VivoPower International i.e., VivoPower International and Polar Power go up and down completely randomly.
Pair Corralation between VivoPower International and Polar Power
Given the investment horizon of 90 days VivoPower International PLC is expected to under-perform the Polar Power. In addition to that, VivoPower International is 1.71 times more volatile than Polar Power. It trades about -0.02 of its total potential returns per unit of risk. Polar Power is currently generating about 0.04 per unit of volatility. If you would invest 294.00 in Polar Power on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Polar Power or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VivoPower International PLC vs. Polar Power
Performance |
| Timeline |
| VivoPower International |
| Polar Power |
VivoPower International and Polar Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VivoPower International and Polar Power
The main advantage of trading using opposite VivoPower International and Polar Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VivoPower International position performs unexpectedly, Polar Power 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 Polar Power will offset losses from the drop in Polar Power's long position.| VivoPower International vs. Emeren Group | VivoPower International vs. Tigo Energy | VivoPower International vs. Sunrun Inc | VivoPower International vs. Sunnova Energy International |
| Polar Power vs. CBAK Energy Technology | Polar Power vs. Ocean Power Technologies | Polar Power vs. Enersys | Polar Power vs. Flux Power Holdings |
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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