Correlation Between POSCO Holdings and ENF Technology
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and ENF 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 ENF 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 ENF Technology Co, you can compare the effects of market volatilities on POSCO Holdings and ENF 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 ENF Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and ENF Technology.
Diversification Opportunities for POSCO Holdings and ENF Technology
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POSCO and ENF is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and ENF Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENF 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 ENF Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENF Technology has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and ENF Technology go up and down completely randomly.
Pair Corralation between POSCO Holdings and ENF Technology
Assuming the 90 days trading horizon POSCO Holdings is expected to generate 0.88 times more return on investment than ENF Technology. However, POSCO Holdings is 1.13 times less risky than ENF Technology. It trades about -0.08 of its potential returns per unit of risk. ENF Technology Co is currently generating about -0.11 per unit of risk. If you would invest 35,268,300 in POSCO Holdings on September 21, 2024 and sell it today you would lose (8,968,300) from holding POSCO Holdings or give up 25.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. ENF Technology Co
Performance |
| Timeline |
| POSCO Holdings |
| ENF Technology |
POSCO Holdings and ENF Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and ENF Technology
The main advantage of trading using opposite POSCO Holdings and ENF Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, ENF 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 ENF Technology will offset losses from the drop in ENF Technology's long position.| POSCO Holdings vs. LG Chemicals | POSCO Holdings vs. Hanwha Solutions | POSCO Holdings vs. Lotte Chemical Corp | POSCO Holdings vs. Hyundai Steel |
| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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