Correlation Between POSCO Holdings and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and XLMedia PLC 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 XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and XLMedia PLC, you can compare the effects of market volatilities on POSCO Holdings and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and XLMedia PLC.
Diversification Opportunities for POSCO Holdings and XLMedia PLC
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and XLMedia is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and XLMedia PLC go up and down completely randomly.
Pair Corralation between POSCO Holdings and XLMedia PLC
Assuming the 90 days horizon POSCO Holdings is expected to under-perform the XLMedia PLC. In addition to that, POSCO Holdings is 1.71 times more volatile than XLMedia PLC. It trades about -0.19 of its total potential returns per unit of risk. XLMedia PLC is currently generating about 0.22 per unit of volatility. If you would invest 13.00 in XLMedia PLC on August 28, 2024 and sell it today you would earn a total of 1.00 from holding XLMedia PLC or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. XLMedia PLC
Performance |
| Timeline |
| POSCO Holdings |
| XLMedia PLC |
POSCO Holdings and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and XLMedia PLC
The main advantage of trading using opposite POSCO Holdings and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.The idea behind POSCO Holdings and XLMedia PLC 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.| XLMedia PLC vs. Grand Canyon Education | XLMedia PLC vs. CHINA EDUCATION GROUP | XLMedia PLC vs. CNVISION MEDIA | XLMedia PLC vs. Flutter Entertainment PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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