Correlation Between ArcelorMittal and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both ArcelorMittal 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 ArcelorMittal and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ArcelorMittal SA and POSCO Holdings, you can compare the effects of market volatilities on ArcelorMittal 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 ArcelorMittal with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ArcelorMittal and POSCO Holdings.
Diversification Opportunities for ArcelorMittal and POSCO Holdings
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ArcelorMittal and POSCO is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ArcelorMittal SA and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and ArcelorMittal 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 ArcelorMittal SA 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 ArcelorMittal i.e., ArcelorMittal and POSCO Holdings go up and down completely randomly.
Pair Corralation between ArcelorMittal and POSCO Holdings
Assuming the 90 days trading horizon ArcelorMittal SA is expected to generate 0.82 times more return on investment than POSCO Holdings. However, ArcelorMittal SA is 1.22 times less risky than POSCO Holdings. It trades about 0.0 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.18 per unit of risk. If you would invest 2,279 in ArcelorMittal SA on August 29, 2024 and sell it today you would lose (10.00) from holding ArcelorMittal SA or give up 0.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ArcelorMittal SA vs. POSCO Holdings
Performance |
| Timeline |
| ArcelorMittal SA |
| POSCO Holdings |
ArcelorMittal and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ArcelorMittal and POSCO Holdings
The main advantage of trading using opposite ArcelorMittal and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ArcelorMittal 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.| ArcelorMittal vs. BJs Wholesale Club | ArcelorMittal vs. Warner Music Group | ArcelorMittal vs. BURLINGTON STORES | ArcelorMittal vs. Fast Retailing Co |
| POSCO Holdings vs. Taiwan Semiconductor Manufacturing | POSCO Holdings vs. Selective Insurance Group | POSCO Holdings vs. Insurance Australia Group | POSCO Holdings vs. ZURICH INSURANCE GROUP |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |