Correlation Between POSCO Holdings and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Foodnamoo 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 Foodnamoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Foodnamoo, you can compare the effects of market volatilities on POSCO Holdings and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Foodnamoo.
Diversification Opportunities for POSCO Holdings and Foodnamoo
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between POSCO and Foodnamoo is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Foodnamoo go up and down completely randomly.
Pair Corralation between POSCO Holdings and Foodnamoo
Assuming the 90 days trading horizon POSCO Holdings is expected to generate 0.72 times more return on investment than Foodnamoo. However, POSCO Holdings is 1.38 times less risky than Foodnamoo. It trades about 0.02 of its potential returns per unit of risk. Foodnamoo is currently generating about -0.05 per unit of risk. If you would invest 27,239,400 in POSCO Holdings on September 3, 2024 and sell it today you would earn a total of 1,010,600 from holding POSCO Holdings or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Foodnamoo
Performance |
| Timeline |
| POSCO Holdings |
| Foodnamoo |
POSCO Holdings and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Foodnamoo
The main advantage of trading using opposite POSCO Holdings and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo's long position.| POSCO Holdings vs. Echomarketing CoLtd | POSCO Holdings vs. Taeyang Metal Industrial | POSCO Holdings vs. Kukil Metal Co | POSCO Holdings vs. GS Retail Co |
| Foodnamoo vs. Youngbo Chemical Co | Foodnamoo vs. Cots Technology Co | Foodnamoo vs. Sung Bo Chemicals | Foodnamoo vs. Koh Young Technology |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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