Correlation Between POSCO Holdings and Sunny Electronics
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Sunny Electronics 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 Sunny Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Sunny Electronics Corp, you can compare the effects of market volatilities on POSCO Holdings and Sunny Electronics 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 Sunny Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Sunny Electronics.
Diversification Opportunities for POSCO Holdings and Sunny Electronics
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and Sunny is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Sunny Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Electronics Corp 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 Sunny Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Electronics Corp has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Sunny Electronics go up and down completely randomly.
Pair Corralation between POSCO Holdings and Sunny Electronics
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Sunny Electronics. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.97 times less risky than Sunny Electronics. The stock trades about -0.11 of its potential returns per unit of risk. The Sunny Electronics Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 161,500 in Sunny Electronics Corp on September 13, 2024 and sell it today you would earn a total of 98,000 from holding Sunny Electronics Corp or generate 60.68% 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. Sunny Electronics Corp
Performance |
| Timeline |
| POSCO Holdings |
| Sunny Electronics Corp |
POSCO Holdings and Sunny Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Sunny Electronics
The main advantage of trading using opposite POSCO Holdings and Sunny Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Sunny Electronics 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 Sunny Electronics will offset losses from the drop in Sunny Electronics' long position.| POSCO Holdings vs. Histeel | POSCO Holdings vs. DB Financial Investment | POSCO Holdings vs. Sangsangin Investment Securities | POSCO Holdings vs. Hankuk Steel Wire |
| Sunny Electronics vs. Samsung Electronics Co | Sunny Electronics vs. Samsung Electronics Co | Sunny Electronics vs. SK Hynix | Sunny Electronics 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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