Correlation Between POSCO Holdings and Tiangong International
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Tiangong International 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 POSCO Holdings and Tiangong International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Tiangong International, you can compare the effects of market volatilities on POSCO Holdings and Tiangong International 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 POSCO Holdings with a short position of Tiangong International. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Tiangong International.
Diversification Opportunities for POSCO Holdings and Tiangong International
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between POSCO and Tiangong is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Tiangong International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiangong International and POSCO Holdings 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 POSCO Holdings are associated (or correlated) with Tiangong International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiangong International has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Tiangong International go up and down completely randomly.
Pair Corralation between POSCO Holdings and Tiangong International
Assuming the 90 days horizon POSCO Holdings is expected to generate 0.74 times more return on investment than Tiangong International. However, POSCO Holdings is 1.36 times less risky than Tiangong International. It trades about 0.07 of its potential returns per unit of risk. Tiangong International is currently generating about 0.01 per unit of risk. If you would invest 4,100 in POSCO Holdings on November 2, 2024 and sell it today you would earn a total of 120.00 from holding POSCO Holdings or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Tiangong International
Performance |
| Timeline |
| POSCO Holdings |
| Tiangong International |
POSCO Holdings and Tiangong International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Tiangong International
The main advantage of trading using opposite POSCO Holdings and Tiangong International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Tiangong International 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 Tiangong International will offset losses from the drop in Tiangong International's long position.| POSCO Holdings vs. MidCap Financial Investment | POSCO Holdings vs. ECHO INVESTMENT ZY | POSCO Holdings vs. SLR Investment Corp | POSCO Holdings vs. CDL INVESTMENT |
| Tiangong International vs. UNIVMUSIC GRPADR050 | Tiangong International vs. NTT DATA | Tiangong International vs. Alliance Data Systems | Tiangong International vs. Teradata Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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