Correlation Between Polar Power and Hollysys Automation

Can any of the company-specific risk be diversified away by investing in both Polar Power and Hollysys Automation 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 Hollysys Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Polar Power and Hollysys Automation Technologies, you can compare the effects of market volatilities on Polar Power and Hollysys Automation 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 Hollysys Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Power and Hollysys Automation.

Diversification Opportunities for Polar Power and Hollysys Automation

0.0

Correlation Coefficient

Polar Power  Hollysys Automation

Pay attention - limited upside

The 3 months correlation between Polar and Hollysys is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Polar Power and Hollysys Automation Technologi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollysys Automation 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 Hollysys Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollysys Automation has no effect on the direction of Polar Power i.e., Polar Power and Hollysys Automation go up and down completely randomly.

Pair Corralation between Polar Power and Hollysys Automation

If you would invest (100.00) in Hollysys Automation Technologies on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Hollysys Automation Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Polar Power  vs.  Hollysys Automation Technologi

Polar Power

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polar Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Hollysys Automation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hollysys Automation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Hollysys Automation is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Polar Power and Hollysys Automation

The main advantage of trading using opposite Polar Power and Hollysys Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Power position performs unexpectedly, Hollysys Automation 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 Hollysys Automation will offset losses from the drop in Hollysys Automation's long position.

The idea behind Polar Power and Hollysys Automation Technologies 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.