Correlation Between POSCO Holdings and SKONEC Entertainment
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and SKONEC Entertainment 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 SKONEC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and SKONEC Entertainment Co, you can compare the effects of market volatilities on POSCO Holdings and SKONEC Entertainment 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 SKONEC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and SKONEC Entertainment.
Diversification Opportunities for POSCO Holdings and SKONEC Entertainment
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and SKONEC is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and SKONEC Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKONEC Entertainment 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 SKONEC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKONEC Entertainment has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and SKONEC Entertainment go up and down completely randomly.
Pair Corralation between POSCO Holdings and SKONEC Entertainment
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the SKONEC Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.59 times less risky than SKONEC Entertainment. The stock trades about -0.08 of its potential returns per unit of risk. The SKONEC Entertainment Co is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 875,000 in SKONEC Entertainment Co on November 3, 2024 and sell it today you would lose (397,500) from holding SKONEC Entertainment Co or give up 45.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
POSCO Holdings vs. SKONEC Entertainment Co
Performance |
| Timeline |
| POSCO Holdings |
| SKONEC Entertainment |
POSCO Holdings and SKONEC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and SKONEC Entertainment
The main advantage of trading using opposite POSCO Holdings and SKONEC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, SKONEC Entertainment 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 SKONEC Entertainment will offset losses from the drop in SKONEC Entertainment's long position.| POSCO Holdings vs. Mobileleader CoLtd | POSCO Holdings vs. ABOV Semiconductor Co | POSCO Holdings vs. ITM Semiconductor Co | POSCO Holdings vs. CU Medical Systems |
| SKONEC Entertainment vs. DB Financial Investment | SKONEC Entertainment vs. Jeju Air Co | SKONEC Entertainment vs. Automobile Pc | SKONEC Entertainment vs. Digital Power Communications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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