Correlation Between Cuckoo Electronics and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Cuckoo Electronics 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 Cuckoo Electronics and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cuckoo Electronics Co and POSCO Holdings, you can compare the effects of market volatilities on Cuckoo Electronics 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 Cuckoo Electronics with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cuckoo Electronics and POSCO Holdings.
Diversification Opportunities for Cuckoo Electronics and POSCO Holdings
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cuckoo and POSCO is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cuckoo Electronics Co and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Cuckoo Electronics 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 Cuckoo Electronics Co 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 Cuckoo Electronics i.e., Cuckoo Electronics and POSCO Holdings go up and down completely randomly.
Pair Corralation between Cuckoo Electronics and POSCO Holdings
Assuming the 90 days trading horizon Cuckoo Electronics Co is expected to under-perform the POSCO Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Cuckoo Electronics Co is 1.96 times less risky than POSCO Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The POSCO Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 25,350,000 in POSCO Holdings on October 29, 2024 and sell it today you would earn a total of 800,000 from holding POSCO Holdings or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cuckoo Electronics Co vs. POSCO Holdings
Performance |
| Timeline |
| Cuckoo Electronics |
| POSCO Holdings |
Cuckoo Electronics and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cuckoo Electronics and POSCO Holdings
The main advantage of trading using opposite Cuckoo Electronics and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cuckoo Electronics 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.| Cuckoo Electronics vs. Daejung Chemicals Metals | Cuckoo Electronics vs. Hanjin Transportation Co | Cuckoo Electronics vs. Kbi Metal Co | Cuckoo Electronics vs. Taegu Broadcasting |
| POSCO Holdings vs. iNtRON Biotechnology | POSCO Holdings vs. Dong A Steel Technology | POSCO Holdings vs. KG Eco Technology | POSCO Holdings vs. HB Technology TD |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |