Correlation Between POSCO Holdings and WONIK Materials
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and WONIK Materials 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 WONIK Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and WONIK Materials CoLtd, you can compare the effects of market volatilities on POSCO Holdings and WONIK Materials 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 WONIK Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and WONIK Materials.
Diversification Opportunities for POSCO Holdings and WONIK Materials
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between POSCO and WONIK is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and WONIK Materials CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WONIK Materials CoLtd 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 WONIK Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WONIK Materials CoLtd has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and WONIK Materials go up and down completely randomly.
Pair Corralation between POSCO Holdings and WONIK Materials
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the WONIK Materials. In addition to that, POSCO Holdings is 1.2 times more volatile than WONIK Materials CoLtd. It trades about -0.2 of its total potential returns per unit of risk. WONIK Materials CoLtd is currently generating about -0.2 per unit of volatility. If you would invest 2,385,000 in WONIK Materials CoLtd on September 13, 2024 and sell it today you would lose (529,000) from holding WONIK Materials CoLtd or give up 22.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
POSCO Holdings vs. WONIK Materials CoLtd
Performance |
| Timeline |
| POSCO Holdings |
| WONIK Materials CoLtd |
POSCO Holdings and WONIK Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and WONIK Materials
The main advantage of trading using opposite POSCO Holdings and WONIK Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, WONIK Materials 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 WONIK Materials will offset losses from the drop in WONIK Materials' long position.| POSCO Holdings vs. Histeel | POSCO Holdings vs. DB Financial Investment | POSCO Holdings vs. Sangsangin Investment Securities | POSCO Holdings vs. Hankuk Steel Wire |
| WONIK Materials vs. Soulbrain Holdings Co | WONIK Materials vs. Wonik Ips Co | WONIK Materials vs. TES Co | WONIK Materials vs. Suprema |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |