Correlation Between Total Soft and Posco ICT
Can any of the company-specific risk be diversified away by investing in both Total Soft and Posco ICT 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 Total Soft and Posco ICT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Soft Bank and Posco ICT, you can compare the effects of market volatilities on Total Soft and Posco ICT 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 Total Soft with a short position of Posco ICT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Soft and Posco ICT.
Diversification Opportunities for Total Soft and Posco ICT
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Total and Posco is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Total Soft Bank and Posco ICT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco ICT and Total Soft 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 Total Soft Bank are associated (or correlated) with Posco ICT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posco ICT has no effect on the direction of Total Soft i.e., Total Soft and Posco ICT go up and down completely randomly.
Pair Corralation between Total Soft and Posco ICT
Assuming the 90 days trading horizon Total Soft Bank is expected to generate 1.92 times more return on investment than Posco ICT. However, Total Soft is 1.92 times more volatile than Posco ICT. It trades about 0.06 of its potential returns per unit of risk. Posco ICT is currently generating about -0.23 per unit of risk. If you would invest 510,000 in Total Soft Bank on August 28, 2024 and sell it today you would earn a total of 20,000 from holding Total Soft Bank or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Soft Bank vs. Posco ICT
Performance |
| Timeline |
| Total Soft Bank |
| Posco ICT |
Total Soft and Posco ICT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Soft and Posco ICT
The main advantage of trading using opposite Total Soft and Posco ICT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Soft position performs unexpectedly, Posco ICT 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 ICT will offset losses from the drop in Posco ICT's long position.| Total Soft vs. Posco ICT | Total Soft vs. Devsisters corporation | Total Soft vs. Nice Information Telecommunication | Total Soft vs. InfoBank |
| Posco ICT vs. Korea Real Estate | Posco ICT vs. Korea Ratings Co | Posco ICT vs. IQuest Co | Posco ICT vs. Wonbang Tech 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 CEOs Directory module to screen CEOs from public companies around the world.
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