Correlation Between POSCO Holdings and Busan Industrial
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Busan Industrial 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 Busan Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Busan Industrial Co, you can compare the effects of market volatilities on POSCO Holdings and Busan Industrial 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 Busan Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Busan Industrial.
Diversification Opportunities for POSCO Holdings and Busan Industrial
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Busan is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Busan Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan 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 Busan Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Industrial has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Busan Industrial go up and down completely randomly.
Pair Corralation between POSCO Holdings and Busan Industrial
Assuming the 90 days trading horizon POSCO Holdings is expected to generate 1.04 times less return on investment than Busan Industrial. But when comparing it to its historical volatility, POSCO Holdings is 1.02 times less risky than Busan Industrial. It trades about 0.01 of its potential returns per unit of risk. Busan Industrial Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,603,890 in Busan Industrial Co on September 13, 2024 and sell it today you would earn a total of 46,110 from holding Busan Industrial Co or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Busan Industrial Co
Performance |
| Timeline |
| POSCO Holdings |
| Busan Industrial |
POSCO Holdings and Busan Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Busan Industrial
The main advantage of trading using opposite POSCO Holdings and Busan Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Busan Industrial 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 Busan Industrial will offset losses from the drop in Busan Industrial's long position.| POSCO Holdings vs. Histeel | POSCO Holdings vs. DB Financial Investment | POSCO Holdings vs. Sangsangin Investment Securities | POSCO Holdings vs. Hankuk Steel Wire |
| Busan Industrial vs. Samsung Electronics Co | Busan Industrial vs. Samsung Electronics Co | Busan Industrial vs. SK Hynix | Busan Industrial 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |