Correlation Between POSCO Holdings and Asia Technology
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Asia Technology 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 Asia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Asia Technology Co, you can compare the effects of market volatilities on POSCO Holdings and Asia Technology 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 Asia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Asia Technology.
Diversification Opportunities for POSCO Holdings and Asia Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between POSCO and Asia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Asia Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Technology 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 Asia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Technology has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Asia Technology go up and down completely randomly.
Pair Corralation between POSCO Holdings and Asia Technology
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Asia Technology. In addition to that, POSCO Holdings is 1.51 times more volatile than Asia Technology Co. It trades about -0.14 of its total potential returns per unit of risk. Asia Technology Co is currently generating about -0.09 per unit of volatility. If you would invest 224,500 in Asia Technology Co on November 1, 2024 and sell it today you would lose (22,500) from holding Asia Technology Co or give up 10.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Asia Technology Co
Performance |
| Timeline |
| POSCO Holdings |
| Asia Technology |
POSCO Holdings and Asia Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Asia Technology
The main advantage of trading using opposite POSCO Holdings and Asia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Asia Technology 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 Asia Technology will offset losses from the drop in Asia Technology's long position.| POSCO Holdings vs. Seoul Semiconductor Co | POSCO Holdings vs. Cuckoo Homesys Co | POSCO Holdings vs. Isu Chemical Co | POSCO Holdings vs. Kyung In Synthetic Corp |
| Asia Technology vs. Kukdong Oil Chemicals | Asia Technology vs. Alton Sports CoLtd | Asia Technology vs. Samlip General Foods | Asia Technology vs. Inzi Display CoLtd |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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