Correlation Between POSCO Holdings and HF FOODS
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and HF FOODS 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 HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and HF FOODS GRP, you can compare the effects of market volatilities on POSCO Holdings and HF FOODS 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 HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and HF FOODS.
Diversification Opportunities for POSCO Holdings and HF FOODS
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POSCO and 3GX is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP 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 HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and HF FOODS go up and down completely randomly.
Pair Corralation between POSCO Holdings and HF FOODS
Assuming the 90 days horizon POSCO Holdings is expected to under-perform the HF FOODS. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.58 times less risky than HF FOODS. The stock trades about -0.06 of its potential returns per unit of risk. The HF FOODS GRP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 356.00 in HF FOODS GRP on September 1, 2024 and sell it today you would lose (16.00) from holding HF FOODS GRP or give up 4.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.27% |
| Values | Daily Returns |
POSCO Holdings vs. HF FOODS GRP
Performance |
| Timeline |
| POSCO Holdings |
| HF FOODS GRP |
POSCO Holdings and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and HF FOODS
The main advantage of trading using opposite POSCO Holdings and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, HF FOODS 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 HF FOODS will offset losses from the drop in HF FOODS's long position.| POSCO Holdings vs. Vulcan Materials | POSCO Holdings vs. AUST AGRICULTURAL | POSCO Holdings vs. THRACE PLASTICS | POSCO Holdings vs. Sumitomo Mitsui Construction |
| HF FOODS vs. Playtech plc | HF FOODS vs. Perdoceo Education | HF FOODS vs. DeVry Education Group | HF FOODS vs. Xinhua Winshare Publishing |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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