Correlation Between POSCO Holdings and BRIT AMER
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and BRIT AMER 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 BRIT AMER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and BRIT AMER TOBACCO, you can compare the effects of market volatilities on POSCO Holdings and BRIT AMER 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 BRIT AMER. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and BRIT AMER.
Diversification Opportunities for POSCO Holdings and BRIT AMER
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and BRIT is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and BRIT AMER TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRIT AMER TOBACCO 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 BRIT AMER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRIT AMER TOBACCO has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and BRIT AMER go up and down completely randomly.
Pair Corralation between POSCO Holdings and BRIT AMER
Assuming the 90 days horizon POSCO Holdings is expected to under-perform the BRIT AMER. In addition to that, POSCO Holdings is 2.23 times more volatile than BRIT AMER TOBACCO. It trades about -0.08 of its total potential returns per unit of risk. BRIT AMER TOBACCO is currently generating about 0.15 per unit of volatility. If you would invest 2,565 in BRIT AMER TOBACCO on November 9, 2024 and sell it today you would earn a total of 1,422 from holding BRIT AMER TOBACCO or generate 55.44% 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. BRIT AMER TOBACCO
Performance |
| Timeline |
| POSCO Holdings |
| BRIT AMER TOBACCO |
POSCO Holdings and BRIT AMER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and BRIT AMER
The main advantage of trading using opposite POSCO Holdings and BRIT AMER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, BRIT AMER 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 BRIT AMER will offset losses from the drop in BRIT AMER's long position.| POSCO Holdings vs. BORR DRILLING NEW | POSCO Holdings vs. SERI INDUSTRIAL EO | POSCO Holdings vs. Algonquin Power Utilities | POSCO Holdings vs. ADRIATIC METALS LS 013355 |
| BRIT AMER vs. GEELY AUTOMOBILE | BRIT AMER vs. MCEWEN MINING INC | BRIT AMER vs. MAGNUM MINING EXP | BRIT AMER vs. Evolution Mining Limited |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |