Correlation Between POSCO Holdings and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Samyang Foods 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 Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Samyang Foods Co, you can compare the effects of market volatilities on POSCO Holdings and Samyang Foods 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 Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Samyang Foods.
Diversification Opportunities for POSCO Holdings and Samyang Foods
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and Samyang is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods 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 Samyang Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyang Foods has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Samyang Foods go up and down completely randomly.
Pair Corralation between POSCO Holdings and Samyang Foods
Assuming the 90 days trading horizon POSCO Holdings is expected to generate 10.81 times less return on investment than Samyang Foods. But when comparing it to its historical volatility, POSCO Holdings is 1.24 times less risky than Samyang Foods. It trades about 0.01 of its potential returns per unit of risk. Samyang Foods Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,616,800 in Samyang Foods Co on September 12, 2024 and sell it today you would earn a total of 54,283,200 from holding Samyang Foods Co or generate 430.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Samyang Foods Co
Performance |
| Timeline |
| POSCO Holdings |
| Samyang Foods |
POSCO Holdings and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Samyang Foods
The main advantage of trading using opposite POSCO Holdings and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Samyang Foods 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 Samyang Foods will offset losses from the drop in Samyang Foods' long position.| POSCO Holdings vs. LG Chemicals | POSCO Holdings vs. Hanwha Solutions | POSCO Holdings vs. Lotte Chemical Corp | POSCO Holdings vs. Hyundai Steel |
| Samyang Foods vs. Samsung Electronics Co | Samyang Foods vs. Samsung Electronics Co | Samyang Foods vs. SK Hynix | Samyang Foods 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |