Correlation Between POSCO Holdings and Canon
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Canon 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 Canon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Canon Inc, you can compare the effects of market volatilities on POSCO Holdings and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Canon.
Diversification Opportunities for POSCO Holdings and Canon
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and Canon is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Canon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Canon go up and down completely randomly.
Pair Corralation between POSCO Holdings and Canon
Assuming the 90 days horizon POSCO Holdings is expected to under-perform the Canon. In addition to that, POSCO Holdings is 1.73 times more volatile than Canon Inc. It trades about -0.18 of its total potential returns per unit of risk. Canon Inc is currently generating about 0.15 per unit of volatility. If you would invest 3,002 in Canon Inc on August 29, 2024 and sell it today you would earn a total of 152.00 from holding Canon Inc or generate 5.06% 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. Canon Inc
Performance |
| Timeline |
| POSCO Holdings |
| Canon Inc |
POSCO Holdings and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Canon
The main advantage of trading using opposite POSCO Holdings and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.| POSCO Holdings vs. Steel Dynamics | POSCO Holdings vs. NIPPON STEEL SPADR | POSCO Holdings vs. Superior Plus Corp | POSCO Holdings vs. SIVERS SEMICONDUCTORS AB |
| Canon vs. CapitaLand Investment Limited | Canon vs. Monster Beverage Corp | Canon vs. Apollo Investment Corp | Canon vs. Virtus Investment Partners |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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