Correlation Between POSCO Holdings and Hansol Homedeco
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Hansol Homedeco 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 Hansol Homedeco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Hansol Homedeco Co, you can compare the effects of market volatilities on POSCO Holdings and Hansol Homedeco 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 Hansol Homedeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Hansol Homedeco.
Diversification Opportunities for POSCO Holdings and Hansol Homedeco
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between POSCO and Hansol is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Hansol Homedeco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansol Homedeco 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 Hansol Homedeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansol Homedeco has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Hansol Homedeco go up and down completely randomly.
Pair Corralation between POSCO Holdings and Hansol Homedeco
Assuming the 90 days trading horizon POSCO Holdings is expected to generate 2.04 times more return on investment than Hansol Homedeco. However, POSCO Holdings is 2.04 times more volatile than Hansol Homedeco Co. It trades about 0.01 of its potential returns per unit of risk. Hansol Homedeco Co is currently generating about -0.07 per unit of risk. If you would invest 27,762,300 in POSCO Holdings on September 14, 2024 and sell it today you would lose (312,300) from holding POSCO Holdings or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Hansol Homedeco Co
Performance |
| Timeline |
| POSCO Holdings |
| Hansol Homedeco |
POSCO Holdings and Hansol Homedeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Hansol Homedeco
The main advantage of trading using opposite POSCO Holdings and Hansol Homedeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Hansol Homedeco 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 Hansol Homedeco will offset losses from the drop in Hansol Homedeco's long position.| POSCO Holdings vs. LG Chemicals | POSCO Holdings vs. Hanwha Solutions | POSCO Holdings vs. Lotte Chemical Corp | POSCO Holdings vs. Hyundai Steel |
| Hansol Homedeco vs. Samsung Electronics Co | Hansol Homedeco vs. Samsung Electronics Co | Hansol Homedeco vs. SK Hynix | Hansol Homedeco 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |