Correlation Between Strainsforpains and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Strainsforpains 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 Strainsforpains and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strainsforpains and POSCO Holdings, you can compare the effects of market volatilities on Strainsforpains 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 Strainsforpains with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strainsforpains and POSCO Holdings.
Diversification Opportunities for Strainsforpains and POSCO Holdings
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Strainsforpains and POSCO is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Strainsforpains and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Strainsforpains 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 Strainsforpains 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 Strainsforpains i.e., Strainsforpains and POSCO Holdings go up and down completely randomly.
Pair Corralation between Strainsforpains and POSCO Holdings
Given the investment horizon of 90 days Strainsforpains is expected to generate 1.69 times more return on investment than POSCO Holdings. However, Strainsforpains is 1.69 times more volatile than POSCO Holdings. It trades about 0.13 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.19 per unit of risk. If you would invest 18.00 in Strainsforpains on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Strainsforpains or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Strainsforpains vs. POSCO Holdings
Performance |
| Timeline |
| Strainsforpains |
| POSCO Holdings |
Strainsforpains and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strainsforpains and POSCO Holdings
The main advantage of trading using opposite Strainsforpains and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strainsforpains 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.| Strainsforpains vs. POSCO Holdings | Strainsforpains vs. Schweizerische Nationalbank | Strainsforpains vs. Berkshire Hathaway | Strainsforpains vs. Berkshire Hathaway |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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