Correlation Between Dongkuk Structures and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Dongkuk Structures 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 Dongkuk Structures and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongkuk Structures Construction and POSCO Holdings, you can compare the effects of market volatilities on Dongkuk Structures 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 Dongkuk Structures with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongkuk Structures and POSCO Holdings.
Diversification Opportunities for Dongkuk Structures and POSCO Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongkuk and POSCO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dongkuk Structures Constructio and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Dongkuk Structures 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 Dongkuk Structures Construction 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 Dongkuk Structures i.e., Dongkuk Structures and POSCO Holdings go up and down completely randomly.
Pair Corralation between Dongkuk Structures and POSCO Holdings
Assuming the 90 days trading horizon Dongkuk Structures Construction is expected to generate 1.65 times more return on investment than POSCO Holdings. However, Dongkuk Structures is 1.65 times more volatile than POSCO Holdings. It trades about 0.09 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.31 per unit of risk. If you would invest 226,500 in Dongkuk Structures Construction on September 28, 2024 and sell it today you would earn a total of 13,000 from holding Dongkuk Structures Construction or generate 5.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongkuk Structures Constructio vs. POSCO Holdings
Performance |
| Timeline |
| Dongkuk Structures |
| POSCO Holdings |
Dongkuk Structures and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongkuk Structures and POSCO Holdings
The main advantage of trading using opposite Dongkuk Structures and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongkuk Structures 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.| Dongkuk Structures vs. Busan Industrial Co | Dongkuk Structures vs. Mirae Asset Daewoo | Dongkuk Structures vs. Shinhan WTI Futures | Dongkuk Structures vs. UNISEM Co |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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