Correlation Between POSCO Holdings and Neoen SA
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Neoen SA 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 Neoen SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Neoen SA, you can compare the effects of market volatilities on POSCO Holdings and Neoen SA 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 Neoen SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Neoen SA.
Diversification Opportunities for POSCO Holdings and Neoen SA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POSCO and Neoen is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Neoen SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neoen SA 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 Neoen SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neoen SA has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Neoen SA go up and down completely randomly.
Pair Corralation between POSCO Holdings and Neoen SA
Assuming the 90 days horizon POSCO Holdings is expected to generate 4.46 times more return on investment than Neoen SA. However, POSCO Holdings is 4.46 times more volatile than Neoen SA. It trades about 0.24 of its potential returns per unit of risk. Neoen SA is currently generating about -0.02 per unit of risk. If you would invest 4,000 in POSCO Holdings on December 3, 2024 and sell it today you would earn a total of 500.00 from holding POSCO Holdings or generate 12.5% 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. Neoen SA
Performance |
| Timeline |
| POSCO Holdings |
| Neoen SA |
POSCO Holdings and Neoen SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Neoen SA
The main advantage of trading using opposite POSCO Holdings and Neoen SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Neoen SA 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 Neoen SA will offset losses from the drop in Neoen SA's long position.| POSCO Holdings vs. Lattice Semiconductor | POSCO Holdings vs. British American Tobacco | POSCO Holdings vs. Siamgas And Petrochemicals | POSCO Holdings vs. ARDAGH METAL PACDL 0001 |
| Neoen SA vs. Encavis AG | Neoen SA vs. TOHOKU EL PWR | Neoen SA vs. BEIJJINGNENG CLERGHYC1 | Neoen SA vs. HOKURIKU EL PWR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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