Correlation Between POSCO Holdings and TAEYANG
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and TAEYANG 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 TAEYANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and TAEYANG, you can compare the effects of market volatilities on POSCO Holdings and TAEYANG 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 TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and TAEYANG.
Diversification Opportunities for POSCO Holdings and TAEYANG
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between POSCO and TAEYANG is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG 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 TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and TAEYANG go up and down completely randomly.
Pair Corralation between POSCO Holdings and TAEYANG
Assuming the 90 days trading horizon POSCO Holdings is expected to generate 2.51 times more return on investment than TAEYANG. However, POSCO Holdings is 2.51 times more volatile than TAEYANG. It trades about 0.01 of its potential returns per unit of risk. TAEYANG is currently generating about -0.02 per unit of risk. If you would invest 29,006,800 in POSCO Holdings on October 15, 2024 and sell it today you would lose (2,806,800) from holding POSCO Holdings or give up 9.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. TAEYANG
Performance |
| Timeline |
| POSCO Holdings |
| TAEYANG |
POSCO Holdings and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and TAEYANG
The main advantage of trading using opposite POSCO Holdings and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG's long position.| POSCO Holdings vs. Next Entertainment World | POSCO Holdings vs. DB Financial Investment | POSCO Holdings vs. Air Busan Co | POSCO Holdings vs. Pureun Mutual Savings |
| TAEYANG vs. SK Telecom Co | TAEYANG vs. Daishin Information Communications | TAEYANG vs. Korea Information Communications | TAEYANG vs. MetaLabs Co |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |