Correlation Between Kbi Metal and Polaris Office
Can any of the company-specific risk be diversified away by investing in both Kbi Metal and Polaris Office 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 Kbi Metal and Polaris Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kbi Metal Co and Polaris Office Corp, you can compare the effects of market volatilities on Kbi Metal and Polaris Office 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 Kbi Metal with a short position of Polaris Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kbi Metal and Polaris Office.
Diversification Opportunities for Kbi Metal and Polaris Office
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kbi and Polaris is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kbi Metal Co and Polaris Office Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Office Corp and Kbi Metal 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 Kbi Metal Co are associated (or correlated) with Polaris Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Office Corp has no effect on the direction of Kbi Metal i.e., Kbi Metal and Polaris Office go up and down completely randomly.
Pair Corralation between Kbi Metal and Polaris Office
Assuming the 90 days trading horizon Kbi Metal Co is expected to under-perform the Polaris Office. But the stock apears to be less risky and, when comparing its historical volatility, Kbi Metal Co is 1.1 times less risky than Polaris Office. The stock trades about -0.14 of its potential returns per unit of risk. The Polaris Office Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 578,000 in Polaris Office Corp on September 24, 2024 and sell it today you would lose (27,000) from holding Polaris Office Corp or give up 4.67% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kbi Metal Co vs. Polaris Office Corp
Performance |
Timeline |
Kbi Metal |
Polaris Office Corp |
Kbi Metal and Polaris Office Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kbi Metal and Polaris Office
The main advantage of trading using opposite Kbi Metal and Polaris Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kbi Metal position performs unexpectedly, Polaris Office 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 Office will offset losses from the drop in Polaris Office's long position.Kbi Metal vs. Woori Technology Investment | Kbi Metal vs. Samsung Card Co | Kbi Metal vs. Korea Real Estate | Kbi Metal vs. CHOROKBAEM PANY Co |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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