Correlation Between POSCO Holdings and SENERELECSPGDR REGS
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and SENERELECSPGDR REGS 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 SENERELECSPGDR REGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and SENERELECSPGDR REGS 1, you can compare the effects of market volatilities on POSCO Holdings and SENERELECSPGDR REGS 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 SENERELECSPGDR REGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and SENERELECSPGDR REGS.
Diversification Opportunities for POSCO Holdings and SENERELECSPGDR REGS
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between POSCO and SENERELECSPGDR is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and SENERELECSPGDR REGS 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENERELECSPGDR REGS 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 SENERELECSPGDR REGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENERELECSPGDR REGS has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and SENERELECSPGDR REGS go up and down completely randomly.
Pair Corralation between POSCO Holdings and SENERELECSPGDR REGS
Assuming the 90 days horizon POSCO Holdings is expected to under-perform the SENERELECSPGDR REGS. In addition to that, POSCO Holdings is 1.25 times more volatile than SENERELECSPGDR REGS 1. It trades about -0.07 of its total potential returns per unit of risk. SENERELECSPGDR REGS 1 is currently generating about 0.01 per unit of volatility. If you would invest 1,000.00 in SENERELECSPGDR REGS 1 on January 18, 2025 and sell it today you would earn a total of 0.00 from holding SENERELECSPGDR REGS 1 or generate 0.0% 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. SENERELECSPGDR REGS 1
Performance |
| Timeline |
| POSCO Holdings |
| SENERELECSPGDR REGS |
POSCO Holdings and SENERELECSPGDR REGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and SENERELECSPGDR REGS
The main advantage of trading using opposite POSCO Holdings and SENERELECSPGDR REGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, SENERELECSPGDR REGS 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 SENERELECSPGDR REGS will offset losses from the drop in SENERELECSPGDR REGS's long position.| POSCO Holdings vs. Autohome ADR | POSCO Holdings vs. CAIRN HOMES EO | POSCO Holdings vs. X FAB Silicon Foundries | POSCO Holdings vs. Casio Computer CoLtd |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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