Correlation Between Dongbang Ship and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship 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 Dongbang Ship and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Ship Machinery and POSCO Holdings, you can compare the effects of market volatilities on Dongbang Ship 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 Dongbang Ship with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and POSCO Holdings.
Diversification Opportunities for Dongbang Ship and POSCO Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongbang and POSCO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Dongbang Ship 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 Dongbang Ship Machinery 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 Dongbang Ship i.e., Dongbang Ship and POSCO Holdings go up and down completely randomly.
Pair Corralation between Dongbang Ship and POSCO Holdings
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to generate 1.78 times more return on investment than POSCO Holdings. However, Dongbang Ship is 1.78 times more volatile than POSCO Holdings. It trades about 0.05 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.31 per unit of risk. If you would invest 294,000 in Dongbang Ship Machinery on September 28, 2024 and sell it today you would earn a total of 9,500 from holding Dongbang Ship Machinery or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Ship Machinery vs. POSCO Holdings
Performance |
| Timeline |
| Dongbang Ship Machinery |
| POSCO Holdings |
Dongbang Ship and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and POSCO Holdings
The main advantage of trading using opposite Dongbang Ship and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship 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.| Dongbang Ship vs. KTB Investment Securities | Dongbang Ship vs. Jeju Bank | Dongbang Ship vs. Jb Financial | Dongbang Ship vs. Woori Technology Investment |
| POSCO Holdings vs. Dongbu Insurance Co | POSCO Holdings vs. Settlebank | POSCO Holdings vs. Jeju Semiconductor Corp | POSCO Holdings vs. Kbi Metal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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