Correlation Between Granite Falls and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Granite Falls 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 Granite Falls and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Falls Energy and POSCO Holdings, you can compare the effects of market volatilities on Granite Falls 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 Granite Falls with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Falls and POSCO Holdings.
Diversification Opportunities for Granite Falls and POSCO Holdings
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and POSCO is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Granite Falls Energy and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Granite Falls 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 Granite Falls Energy 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 Granite Falls i.e., Granite Falls and POSCO Holdings go up and down completely randomly.
Pair Corralation between Granite Falls and POSCO Holdings
Given the investment horizon of 90 days Granite Falls Energy is expected to under-perform the POSCO Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Granite Falls Energy is 2.0 times less risky than POSCO Holdings. The pink sheet trades about -0.03 of its potential returns per unit of risk. The POSCO Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 5,409 in POSCO Holdings on September 14, 2024 and sell it today you would lose (641.00) from holding POSCO Holdings or give up 11.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Falls Energy vs. POSCO Holdings
Performance |
| Timeline |
| Granite Falls Energy |
| POSCO Holdings |
Granite Falls and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Falls and POSCO Holdings
The main advantage of trading using opposite Granite Falls and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Falls 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.| Granite Falls vs. POSCO Holdings | Granite Falls vs. Schweizerische Nationalbank | Granite Falls vs. Berkshire Hathaway | Granite Falls 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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