Correlation Between ATON and Posco ICT
Can any of the company-specific risk be diversified away by investing in both ATON 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 ATON and Posco ICT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATON Inc and Posco ICT, you can compare the effects of market volatilities on ATON 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 ATON with a short position of Posco ICT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATON and Posco ICT.
Diversification Opportunities for ATON and Posco ICT
Excellent diversification
The 3 months correlation between ATON and Posco is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ATON Inc and Posco ICT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco ICT and ATON 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 ATON Inc 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 ATON i.e., ATON and Posco ICT go up and down completely randomly.
Pair Corralation between ATON and Posco ICT
Assuming the 90 days trading horizon ATON is expected to generate 7.96 times less return on investment than Posco ICT. But when comparing it to its historical volatility, ATON Inc is 1.72 times less risky than Posco ICT. It trades about 0.02 of its potential returns per unit of risk. Posco ICT is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 667,805 in Posco ICT on September 4, 2024 and sell it today you would earn a total of 1,412,195 from holding Posco ICT or generate 211.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.34% |
| Values | Daily Returns |
ATON Inc vs. Posco ICT
Performance |
| Timeline |
| ATON Inc |
| Posco ICT |
ATON and Posco ICT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATON and Posco ICT
The main advantage of trading using opposite ATON and Posco ICT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATON 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.| ATON vs. Sungdo Engineering Construction | ATON vs. Dongwoo Farm To | ATON vs. HJ ShipBuilding Construction | ATON vs. Hanshin Construction Co |
| Posco ICT vs. SFA Engineering | Posco ICT vs. CJ ENM | Posco ICT vs. Paradise Co | Posco ICT vs. Seoul Semiconductor 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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