Correlation Between POSCO Holdings and Walt Disney
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Walt Disney 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 Walt Disney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and The Walt Disney, you can compare the effects of market volatilities on POSCO Holdings and Walt Disney 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 Walt Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Walt Disney.
Diversification Opportunities for POSCO Holdings and Walt Disney
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Walt is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and The Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney 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 Walt Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Walt Disney go up and down completely randomly.
Pair Corralation between POSCO Holdings and Walt Disney
Assuming the 90 days horizon POSCO Holdings is expected to generate 2.24 times more return on investment than Walt Disney. However, POSCO Holdings is 2.24 times more volatile than The Walt Disney. It trades about 0.07 of its potential returns per unit of risk. The Walt Disney is currently generating about 0.04 per unit of risk. If you would invest 4,100 in POSCO Holdings on November 2, 2024 and sell it today you would earn a total of 120.00 from holding POSCO Holdings or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
POSCO Holdings vs. The Walt Disney
Performance |
| Timeline |
| POSCO Holdings |
| Walt Disney |
POSCO Holdings and Walt Disney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Walt Disney
The main advantage of trading using opposite POSCO Holdings and Walt Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Walt Disney 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 Walt Disney will offset losses from the drop in Walt Disney's long position.| POSCO Holdings vs. MidCap Financial Investment | POSCO Holdings vs. ECHO INVESTMENT ZY | POSCO Holdings vs. SLR Investment Corp | POSCO Holdings vs. CDL INVESTMENT |
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 Stocks Directory module to find actively traded stocks across global markets.
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