Correlation Between Polarx and Superior Resources

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Polarx and Superior Resources 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 Polarx and Superior Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polarx and Superior Resources, you can compare the effects of market volatilities on Polarx and Superior Resources 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 Polarx with a short position of Superior Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polarx and Superior Resources.

Diversification Opportunities for Polarx and Superior Resources

PolarxSuperiorDiversified AwayPolarxSuperiorDiversified Away100%
0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Polarx and Superior is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Polarx and Superior Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Resources and Polarx 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 Polarx are associated (or correlated) with Superior Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Resources has no effect on the direction of Polarx i.e., Polarx and Superior Resources go up and down completely randomly.

Pair Corralation between Polarx and Superior Resources

Assuming the 90 days trading horizon Polarx is expected to under-perform the Superior Resources. In addition to that, Polarx is 1.12 times more volatile than Superior Resources. It trades about -0.03 of its total potential returns per unit of risk. Superior Resources is currently generating about -0.02 per unit of volatility. If you would invest  0.80  in Superior Resources on September 28, 2024 and sell it today you would lose (0.20) from holding Superior Resources or give up 25.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Polarx  vs.  Superior Resources

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20-10010203040
JavaScript chart by amCharts 3.21.15PXX SPQ
       Timeline  
Polarx 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Polarx has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Superior Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Superior Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecDec0.0050.00550.0060.00650.0070.00750.008

Polarx and Superior Resources Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.4-10.04-6.67-3.310.03.226.59.7813.05 0.00600.00650.0070
JavaScript chart by amCharts 3.21.15PXX SPQ
       Returns  

Pair Trading with Polarx and Superior Resources

The main advantage of trading using opposite Polarx and Superior Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polarx position performs unexpectedly, Superior Resources 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 Superior Resources will offset losses from the drop in Superior Resources' long position.
The idea behind Polarx and Superior Resources 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.
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.

Other Complementary Tools

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Money Managers
Screen money managers from public funds and ETFs managed around the world