Correlation Between Foodnamoo and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Foodnamoo 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 Foodnamoo and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foodnamoo and POSCO Holdings, you can compare the effects of market volatilities on Foodnamoo 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 Foodnamoo with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foodnamoo and POSCO Holdings.
Diversification Opportunities for Foodnamoo and POSCO Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Foodnamoo and POSCO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Foodnamoo and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Foodnamoo 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 Foodnamoo 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 Foodnamoo i.e., Foodnamoo and POSCO Holdings go up and down completely randomly.
Pair Corralation between Foodnamoo and POSCO Holdings
Assuming the 90 days trading horizon Foodnamoo is expected to generate 0.83 times more return on investment than POSCO Holdings. However, Foodnamoo is 1.21 times less risky than POSCO Holdings. It trades about -0.08 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.2 per unit of risk. If you would invest 323,000 in Foodnamoo on September 1, 2024 and sell it today you would lose (19,000) from holding Foodnamoo or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foodnamoo vs. POSCO Holdings
Performance |
| Timeline |
| Foodnamoo |
| POSCO Holdings |
Foodnamoo and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foodnamoo and POSCO Holdings
The main advantage of trading using opposite Foodnamoo and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foodnamoo 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.| Foodnamoo vs. Choil Aluminum | Foodnamoo vs. PJ Metal Co | Foodnamoo vs. Youngsin Metal Industrial | Foodnamoo vs. Histeel |
| POSCO Holdings vs. Foodnamoo | POSCO Holdings vs. SH Energy Chemical | POSCO Holdings vs. Kukdo Chemical Co | POSCO Holdings vs. FOODWELL 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| CEOs Directory Screen CEOs from public companies around the world |