Correlation Between POSCO Holdings and Innowireless
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Innowireless 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 Innowireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Innowireless Co, you can compare the effects of market volatilities on POSCO Holdings and Innowireless 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 Innowireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Innowireless.
Diversification Opportunities for POSCO Holdings and Innowireless
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Innowireless is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Innowireless Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innowireless 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 Innowireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innowireless has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Innowireless go up and down completely randomly.
Pair Corralation between POSCO Holdings and Innowireless
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Innowireless. In addition to that, POSCO Holdings is 1.19 times more volatile than Innowireless Co. It trades about -0.06 of its total potential returns per unit of risk. Innowireless Co is currently generating about -0.01 per unit of volatility. If you would invest 2,225,000 in Innowireless Co on September 12, 2024 and sell it today you would lose (321,000) from holding Innowireless Co or give up 14.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.8% |
| Values | Daily Returns |
POSCO Holdings vs. Innowireless Co
Performance |
| Timeline |
| POSCO Holdings |
| Innowireless |
POSCO Holdings and Innowireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Innowireless
The main advantage of trading using opposite POSCO Holdings and Innowireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Innowireless 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 Innowireless will offset losses from the drop in Innowireless' long position.| POSCO Holdings vs. LG Chemicals | POSCO Holdings vs. Hanwha Solutions | POSCO Holdings vs. Lotte Chemical Corp | POSCO Holdings vs. Hyundai Steel |
| Innowireless vs. Samsung Electronics Co | Innowireless vs. Samsung Electronics Co | Innowireless vs. SK Hynix | Innowireless 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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 | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets |