Correlation Between POSCO Holdings and Tplex
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Tplex 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 Tplex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Tplex Co, you can compare the effects of market volatilities on POSCO Holdings and Tplex 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 Tplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Tplex.
Diversification Opportunities for POSCO Holdings and Tplex
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and Tplex is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Tplex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tplex 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 Tplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tplex has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Tplex go up and down completely randomly.
Pair Corralation between POSCO Holdings and Tplex
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Tplex. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.07 times less risky than Tplex. The stock trades about -0.17 of its potential returns per unit of risk. The Tplex Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 311,500 in Tplex Co on November 9, 2024 and sell it today you would earn a total of 1,500 from holding Tplex Co or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Tplex Co
Performance |
| Timeline |
| POSCO Holdings |
| Tplex |
POSCO Holdings and Tplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Tplex
The main advantage of trading using opposite POSCO Holdings and Tplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Tplex 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 Tplex will offset losses from the drop in Tplex's long position.| POSCO Holdings vs. Alton Sports CoLtd | POSCO Holdings vs. Echomarketing CoLtd | POSCO Holdings vs. Sangsin Energy Display | POSCO Holdings vs. Grand Korea Leisure |
| Tplex vs. Ssangyong Information Communication | Tplex vs. Nable Communications | Tplex vs. Nice Information Telecommunication | Tplex vs. Innowireless 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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