Correlation Between POSCO Holdings and JW Shinyak
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and JW Shinyak 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 JW Shinyak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and JW Shinyak, you can compare the effects of market volatilities on POSCO Holdings and JW Shinyak 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 JW Shinyak. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and JW Shinyak.
Diversification Opportunities for POSCO Holdings and JW Shinyak
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POSCO and 067290 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and JW Shinyak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JW Shinyak 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 JW Shinyak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JW Shinyak has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and JW Shinyak go up and down completely randomly.
Pair Corralation between POSCO Holdings and JW Shinyak
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the JW Shinyak. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.02 times less risky than JW Shinyak. The stock trades about -0.16 of its potential returns per unit of risk. The JW Shinyak is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 138,100 in JW Shinyak on August 31, 2024 and sell it today you would earn a total of 11,400 from holding JW Shinyak or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
POSCO Holdings vs. JW Shinyak
Performance |
| Timeline |
| POSCO Holdings |
| JW Shinyak |
POSCO Holdings and JW Shinyak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and JW Shinyak
The main advantage of trading using opposite POSCO Holdings and JW Shinyak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, JW Shinyak 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 JW Shinyak will offset losses from the drop in JW Shinyak's long position.| POSCO Holdings vs. Youngsin Metal Industrial | POSCO Holdings vs. Sunny Electronics Corp | POSCO Holdings vs. Daeduck Electronics Co | POSCO Holdings vs. Daejung Chemicals Metals |
| JW Shinyak vs. SCI Information Service | JW Shinyak vs. Moadata Co | JW Shinyak vs. Korea Information Engineering | JW Shinyak vs. PJ Metal 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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