Correlation Between POSCO M and Amogreentech
Can any of the company-specific risk be diversified away by investing in both POSCO M and Amogreentech 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 M and Amogreentech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO M TECH Co and Amogreentech Co, you can compare the effects of market volatilities on POSCO M and Amogreentech 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 M with a short position of Amogreentech. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO M and Amogreentech.
Diversification Opportunities for POSCO M and Amogreentech
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between POSCO and Amogreentech is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding POSCO M TECH Co and Amogreentech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech and POSCO M 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 M TECH Co are associated (or correlated) with Amogreentech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech has no effect on the direction of POSCO M i.e., POSCO M and Amogreentech go up and down completely randomly.
Pair Corralation between POSCO M and Amogreentech
Assuming the 90 days trading horizon POSCO M TECH Co is expected to generate 1.34 times more return on investment than Amogreentech. However, POSCO M is 1.34 times more volatile than Amogreentech Co. It trades about -0.03 of its potential returns per unit of risk. Amogreentech Co is currently generating about -0.06 per unit of risk. If you would invest 2,236,584 in POSCO M TECH Co on August 25, 2024 and sell it today you would lose (845,584) from holding POSCO M TECH Co or give up 37.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO M TECH Co vs. Amogreentech Co
Performance |
| Timeline |
| POSCO M TECH |
| Amogreentech |
POSCO M and Amogreentech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO M and Amogreentech
The main advantage of trading using opposite POSCO M and Amogreentech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO M position performs unexpectedly, Amogreentech 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 Amogreentech will offset losses from the drop in Amogreentech's long position.| POSCO M vs. LG Chemicals | POSCO M vs. POSCO Holdings | POSCO M vs. Lotte Chemical Corp | POSCO M vs. Hyundai Steel |
| Amogreentech vs. Seoul Semiconductor Co | Amogreentech vs. PJ Metal Co | Amogreentech vs. Daedong Metals Co | Amogreentech vs. Samsung Publishing 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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