Correlation Between Korea Shipbuilding and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding and POSCO Holdings 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 Korea Shipbuilding and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and POSCO Holdings, you can compare the effects of market volatilities on Korea Shipbuilding and POSCO Holdings 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 Korea Shipbuilding with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and POSCO Holdings.
Diversification Opportunities for Korea Shipbuilding and POSCO Holdings
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and POSCO is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Korea Shipbuilding 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 Korea Shipbuilding Offshore are associated (or correlated) with POSCO Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSCO Holdings has no effect on the direction of Korea Shipbuilding i.e., Korea Shipbuilding and POSCO Holdings go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and POSCO Holdings
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 0.78 times more return on investment than POSCO Holdings. However, Korea Shipbuilding Offshore is 1.28 times less risky than POSCO Holdings. It trades about 0.19 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.2 per unit of risk. If you would invest 18,340,000 in Korea Shipbuilding Offshore on September 1, 2024 and sell it today you would earn a total of 2,110,000 from holding Korea Shipbuilding Offshore or generate 11.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. POSCO Holdings
Performance |
| Timeline |
| Korea Shipbuilding |
| POSCO Holdings |
Korea Shipbuilding and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and POSCO Holdings
The main advantage of trading using opposite Korea Shipbuilding and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding position performs unexpectedly, POSCO Holdings 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 POSCO Holdings will offset losses from the drop in POSCO Holdings' long position.| Korea Shipbuilding vs. Korea New Network | Korea Shipbuilding vs. ICD Co | Korea Shipbuilding vs. DYPNF CoLtd | Korea Shipbuilding vs. Busan Industrial Co |
| POSCO Holdings vs. Foodnamoo | POSCO Holdings vs. SH Energy Chemical | POSCO Holdings vs. Kukdo Chemical Co | POSCO Holdings vs. FOODWELL 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |