Correlation Between Posco Chemical and LabGenomics
Can any of the company-specific risk be diversified away by investing in both Posco Chemical and LabGenomics 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 Posco Chemical and LabGenomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Posco Chemical Co and LabGenomics Co, you can compare the effects of market volatilities on Posco Chemical and LabGenomics 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 Posco Chemical with a short position of LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Posco Chemical and LabGenomics.
Diversification Opportunities for Posco Chemical and LabGenomics
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Posco and LabGenomics is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Posco Chemical Co and LabGenomics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LabGenomics and Posco Chemical 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 Posco Chemical Co are associated (or correlated) with LabGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LabGenomics has no effect on the direction of Posco Chemical i.e., Posco Chemical and LabGenomics go up and down completely randomly.
Pair Corralation between Posco Chemical and LabGenomics
Assuming the 90 days trading horizon Posco Chemical Co is expected to under-perform the LabGenomics. But the stock apears to be less risky and, when comparing its historical volatility, Posco Chemical Co is 1.25 times less risky than LabGenomics. The stock trades about -0.07 of its potential returns per unit of risk. The LabGenomics Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 427,000 in LabGenomics Co on September 3, 2024 and sell it today you would lose (158,000) from holding LabGenomics Co or give up 37.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Posco Chemical Co vs. LabGenomics Co
Performance |
| Timeline |
| Posco Chemical |
| LabGenomics |
Posco Chemical and LabGenomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Posco Chemical and LabGenomics
The main advantage of trading using opposite Posco Chemical and LabGenomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Posco Chemical position performs unexpectedly, LabGenomics 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 LabGenomics will offset losses from the drop in LabGenomics' long position.| Posco Chemical vs. Lotte Chilsung Beverage | Posco Chemical vs. SCI Information Service | Posco Chemical vs. Handok Clean Tech | Posco Chemical vs. Samyang Foods Co |
| LabGenomics vs. SH Energy Chemical | LabGenomics vs. Miwon Chemical | LabGenomics vs. Barunson Entertainment Arts | LabGenomics vs. Posco Chemical Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |