Correlation Between COFCO Joycome and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome 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 COFCO Joycome and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and POSCO Holdings, you can compare the effects of market volatilities on COFCO Joycome 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 COFCO Joycome with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and POSCO Holdings.
Diversification Opportunities for COFCO Joycome and POSCO Holdings
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COFCO and POSCO is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and COFCO Joycome 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 COFCO Joycome Foods 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 COFCO Joycome i.e., COFCO Joycome and POSCO Holdings go up and down completely randomly.
Pair Corralation between COFCO Joycome and POSCO Holdings
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the POSCO Holdings. But the stock apears to be less risky and, when comparing its historical volatility, COFCO Joycome Foods is 1.59 times less risky than POSCO Holdings. The stock trades about -0.22 of its potential returns per unit of risk. The POSCO Holdings is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,040 in POSCO Holdings on October 28, 2024 and sell it today you would earn a total of 200.00 from holding POSCO Holdings or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. POSCO Holdings
Performance |
| Timeline |
| COFCO Joycome Foods |
| POSCO Holdings |
COFCO Joycome and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and POSCO Holdings
The main advantage of trading using opposite COFCO Joycome and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome 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.| COFCO Joycome vs. DEVRY EDUCATION GRP | COFCO Joycome vs. Xinhua Winshare Publishing | COFCO Joycome vs. Firan Technology Group | COFCO Joycome vs. DeVry Education Group |
| POSCO Holdings vs. Tyson Foods | POSCO Holdings vs. Major Drilling Group | POSCO Holdings vs. Hyatt Hotels | POSCO Holdings vs. PLANT VEDA FOODS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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