Correlation Between POSCO Holdings and Zinus
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Zinus 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 Zinus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Zinus Inc, you can compare the effects of market volatilities on POSCO Holdings and Zinus 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 Zinus. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Zinus.
Diversification Opportunities for POSCO Holdings and Zinus
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POSCO and Zinus is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Zinus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinus Inc 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 Zinus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinus Inc has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Zinus go up and down completely randomly.
Pair Corralation between POSCO Holdings and Zinus
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Zinus. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.35 times less risky than Zinus. The stock trades about -0.12 of its potential returns per unit of risk. The Zinus Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,472,728 in Zinus Inc on October 11, 2024 and sell it today you would earn a total of 162,272 from holding Zinus Inc or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
POSCO Holdings vs. Zinus Inc
Performance |
| Timeline |
| POSCO Holdings |
| Zinus Inc |
POSCO Holdings and Zinus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Zinus
The main advantage of trading using opposite POSCO Holdings and Zinus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Zinus 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 Zinus will offset losses from the drop in Zinus' long position.| POSCO Holdings vs. GS Retail Co | POSCO Holdings vs. Korea Information Communications | POSCO Holdings vs. Lotte Data Communication | POSCO Holdings vs. Daishin Information Communications |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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