Correlation Between Polar Power and Generation Alpha
Can any of the company-specific risk be diversified away by investing in both Polar Power and Generation Alpha 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 Generation Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Power and Generation Alpha, you can compare the effects of market volatilities on Polar Power and Generation Alpha 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 Generation Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Power and Generation Alpha.
Diversification Opportunities for Polar Power and Generation Alpha
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Polar and Generation is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Polar Power and Generation Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Alpha 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 Generation Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Alpha has no effect on the direction of Polar Power i.e., Polar Power and Generation Alpha go up and down completely randomly.
Pair Corralation between Polar Power and Generation Alpha
Given the investment horizon of 90 days Polar Power is expected to generate 75.38 times less return on investment than Generation Alpha. But when comparing it to its historical volatility, Polar Power is 3.97 times less risky than Generation Alpha. It trades about 0.01 of its potential returns per unit of risk. Generation Alpha is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Generation Alpha on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Generation Alpha or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Polar Power vs. Generation Alpha
Performance |
Timeline |
Polar Power |
Generation Alpha |
Polar Power and Generation Alpha Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Polar Power and Generation Alpha
The main advantage of trading using opposite Polar Power and Generation Alpha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Power position performs unexpectedly, Generation Alpha 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 Generation Alpha will offset losses from the drop in Generation Alpha'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 |
Generation Alpha vs. King Resources | Generation Alpha vs. Dais Analytic Corp | Generation Alpha vs. Polar Power | Generation Alpha vs. Ozop Surgical Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
CEOs Directory Screen CEOs from public companies around the world | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |