Correlation Between POSCO Holdings and Graphic Packaging
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Graphic Packaging 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 Graphic Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Graphic Packaging Holding, you can compare the effects of market volatilities on POSCO Holdings and Graphic Packaging 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 Graphic Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Graphic Packaging.
Diversification Opportunities for POSCO Holdings and Graphic Packaging
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and Graphic is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Graphic Packaging Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphic Packaging Holding 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 Graphic Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphic Packaging Holding has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Graphic Packaging go up and down completely randomly.
Pair Corralation between POSCO Holdings and Graphic Packaging
Assuming the 90 days horizon POSCO Holdings is expected to under-perform the Graphic Packaging. In addition to that, POSCO Holdings is 1.96 times more volatile than Graphic Packaging Holding. It trades about -0.27 of its total potential returns per unit of risk. Graphic Packaging Holding is currently generating about 0.29 per unit of volatility. If you would invest 2,570 in Graphic Packaging Holding on September 2, 2024 and sell it today you would earn a total of 235.00 from holding Graphic Packaging Holding or generate 9.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Graphic Packaging Holding
Performance |
| Timeline |
| POSCO Holdings |
| Graphic Packaging Holding |
POSCO Holdings and Graphic Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Graphic Packaging
The main advantage of trading using opposite POSCO Holdings and Graphic Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Graphic Packaging 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 Graphic Packaging will offset losses from the drop in Graphic Packaging's long position.The idea behind POSCO Holdings and Graphic Packaging Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Graphic Packaging vs. Packaging of | Graphic Packaging vs. Smurfit Kappa Group | Graphic Packaging vs. Superior Plus Corp | Graphic Packaging vs. Origin Agritech |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |