Correlation Between POSCO Holdings and Samhwa Paint
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Samhwa Paint 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 Holdings and Samhwa Paint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Samhwa Paint Industrial, you can compare the effects of market volatilities on POSCO Holdings and Samhwa Paint 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 Holdings with a short position of Samhwa Paint. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Samhwa Paint.
Diversification Opportunities for POSCO Holdings and Samhwa Paint
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POSCO and Samhwa is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Samhwa Paint Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhwa Paint Industrial and POSCO Holdings 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 Holdings are associated (or correlated) with Samhwa Paint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhwa Paint Industrial has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Samhwa Paint go up and down completely randomly.
Pair Corralation between POSCO Holdings and Samhwa Paint
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Samhwa Paint. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.22 times less risky than Samhwa Paint. The stock trades about -0.06 of its potential returns per unit of risk. The Samhwa Paint Industrial is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 582,084 in Samhwa Paint Industrial on September 12, 2024 and sell it today you would earn a total of 41,916 from holding Samhwa Paint Industrial or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Samhwa Paint Industrial
Performance |
| Timeline |
| POSCO Holdings |
| Samhwa Paint Industrial |
POSCO Holdings and Samhwa Paint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Samhwa Paint
The main advantage of trading using opposite POSCO Holdings and Samhwa Paint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Samhwa Paint 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 Samhwa Paint will offset losses from the drop in Samhwa Paint's long position.| POSCO Holdings vs. LG Chemicals | POSCO Holdings vs. Hanwha Solutions | POSCO Holdings vs. Lotte Chemical Corp | POSCO Holdings vs. Hyundai Steel |
| Samhwa Paint vs. Samsung Electronics Co | Samhwa Paint vs. Samsung Electronics Co | Samhwa Paint vs. SK Hynix | Samhwa Paint vs. POSCO Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |