Correlation Between POSCO Holdings and Jin Air
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Jin Air 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 Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Jin Air Co, you can compare the effects of market volatilities on POSCO Holdings and Jin Air 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 Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Jin Air.
Diversification Opportunities for POSCO Holdings and Jin Air
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and Jin is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air 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 Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Jin Air go up and down completely randomly.
Pair Corralation between POSCO Holdings and Jin Air
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Jin Air. In addition to that, POSCO Holdings is 1.21 times more volatile than Jin Air Co. It trades about -0.06 of its total potential returns per unit of risk. Jin Air Co is currently generating about -0.03 per unit of volatility. If you would invest 1,392,000 in Jin Air Co on September 12, 2024 and sell it today you would lose (363,000) from holding Jin Air Co or give up 26.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Jin Air Co
Performance |
| Timeline |
| POSCO Holdings |
| Jin Air |
POSCO Holdings and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Jin Air
The main advantage of trading using opposite POSCO Holdings and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.| POSCO Holdings vs. LG Chemicals | POSCO Holdings vs. Hanwha Solutions | POSCO Holdings vs. Lotte Chemical Corp | POSCO Holdings vs. Hyundai Steel |
| Jin Air vs. Air Busan Co | Jin Air vs. Tway Air Co | Jin Air vs. Solution Advanced Technology | Jin Air vs. Busan Industrial 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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