Correlation Between POSCO Holdings and Taekwang Ind
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Taekwang Ind 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 Taekwang Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Taekwang Ind, you can compare the effects of market volatilities on POSCO Holdings and Taekwang Ind 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 Taekwang Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Taekwang Ind.
Diversification Opportunities for POSCO Holdings and Taekwang Ind
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POSCO and Taekwang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Taekwang Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taekwang Ind 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 Taekwang Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taekwang Ind has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Taekwang Ind go up and down completely randomly.
Pair Corralation between POSCO Holdings and Taekwang Ind
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Taekwang Ind. In addition to that, POSCO Holdings is 2.06 times more volatile than Taekwang Ind. It trades about -0.01 of its total potential returns per unit of risk. Taekwang Ind is currently generating about 0.06 per unit of volatility. If you would invest 61,500,000 in Taekwang Ind on November 5, 2024 and sell it today you would earn a total of 600,000 from holding Taekwang Ind or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
POSCO Holdings vs. Taekwang Ind
Performance |
| Timeline |
| POSCO Holdings |
| Taekwang Ind |
POSCO Holdings and Taekwang Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Taekwang Ind
The main advantage of trading using opposite POSCO Holdings and Taekwang Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Taekwang Ind 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 Taekwang Ind will offset losses from the drop in Taekwang Ind's long position.| POSCO Holdings vs. Netmarble Games Corp | POSCO Holdings vs. HB Technology TD | POSCO Holdings vs. KG Eco Technology | POSCO Holdings vs. Hanjin Transportation Co |
| Taekwang Ind vs. ABCO Electronics Co | Taekwang Ind vs. DAEDUCK ELECTRONICS CoLtd | Taekwang Ind vs. UJU Electronics Co | Taekwang Ind vs. Daehan Steel |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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