Correlation Between POSCO Holdings and Playgram
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Playgram 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 Playgram into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Playgram Co, you can compare the effects of market volatilities on POSCO Holdings and Playgram 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 Playgram. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Playgram.
Diversification Opportunities for POSCO Holdings and Playgram
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between POSCO and Playgram is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Playgram Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playgram 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 Playgram. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playgram has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Playgram go up and down completely randomly.
Pair Corralation between POSCO Holdings and Playgram
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Playgram. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.27 times less risky than Playgram. The stock trades about -0.12 of its potential returns per unit of risk. The Playgram Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 35,800 in Playgram Co on August 25, 2024 and sell it today you would earn a total of 2,600 from holding Playgram Co or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Playgram Co
Performance |
| Timeline |
| POSCO Holdings |
| Playgram |
POSCO Holdings and Playgram Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Playgram
The main advantage of trading using opposite POSCO Holdings and Playgram positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Playgram 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 Playgram will offset losses from the drop in Playgram's long position.| POSCO Holdings vs. LG Chemicals | POSCO Holdings vs. Lotte Chemical Corp | POSCO Holdings vs. Hyundai Steel | POSCO Holdings vs. Dongkuk Steel Mill |
| Playgram vs. LG Chemicals | Playgram vs. POSCO Holdings | Playgram vs. Lotte Chemical Corp | Playgram vs. Hyundai 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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