Correlation Between Golden Energy and Polaris Media

Can any of the company-specific risk be diversified away by investing in both Golden Energy and Polaris Media 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 Golden Energy and Polaris Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Golden Energy Offshore and Polaris Media, you can compare the effects of market volatilities on Golden Energy and Polaris Media 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 Golden Energy with a short position of Polaris Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Energy and Polaris Media.

Diversification Opportunities for Golden Energy and Polaris Media

-0.54

Correlation Coefficient

Golden Energy  Polaris Media

Excellent diversification

The 3 months correlation between Golden and Polaris is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Golden Energy Offshore and Polaris Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Media and Golden Energy 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 Golden Energy Offshore are associated (or correlated) with Polaris Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Media has no effect on the direction of Golden Energy i.e., Golden Energy and Polaris Media go up and down completely randomly.

Pair Corralation between Golden Energy and Polaris Media

Assuming the 90 days trading horizon Golden Energy Offshore is expected to generate 1.4 times more return on investment than Polaris Media. However, Golden Energy is 1.4 times more volatile than Polaris Media. It trades about 0.1 of its potential returns per unit of risk. Polaris Media is currently generating about -0.04 per unit of risk. If you would invest  1,685  in Golden Energy Offshore on April 24, 2025 and sell it today you would earn a total of  290.00  from holding Golden Energy Offshore or generate 17.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Golden Energy Offshore  vs.  Polaris Media

Golden Energy Offshore

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Golden Energy Offshore are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak essential indicators, Golden Energy disclosed solid returns over the last few months and may actually be approaching a breakup point.

Polaris Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polaris Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Polaris Media is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Golden Energy and Polaris Media

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

The idea behind Golden Energy Offshore and Polaris Media 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.