Correlation Between POSCO Holdings and Almaden Minerals
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Almaden Minerals 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 Almaden Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Almaden Minerals, you can compare the effects of market volatilities on POSCO Holdings and Almaden Minerals 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 Almaden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Almaden Minerals.
Diversification Opportunities for POSCO Holdings and Almaden Minerals
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between POSCO and Almaden is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Almaden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almaden Minerals 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 Almaden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almaden Minerals has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Almaden Minerals go up and down completely randomly.
Pair Corralation between POSCO Holdings and Almaden Minerals
Considering the 90-day investment horizon POSCO Holdings is expected to generate 0.62 times more return on investment than Almaden Minerals. However, POSCO Holdings is 1.62 times less risky than Almaden Minerals. It trades about -0.01 of its potential returns per unit of risk. Almaden Minerals is currently generating about -0.07 per unit of risk. If you would invest 5,792 in POSCO Holdings on November 2, 2024 and sell it today you would lose (1,340) from holding POSCO Holdings or give up 23.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.67% |
| Values | Daily Returns |
POSCO Holdings vs. Almaden Minerals
Performance |
| Timeline |
| POSCO Holdings |
| Almaden Minerals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
POSCO Holdings and Almaden Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Almaden Minerals
The main advantage of trading using opposite POSCO Holdings and Almaden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Almaden Minerals 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 Almaden Minerals will offset losses from the drop in Almaden Minerals' long position.| POSCO Holdings vs. Olympic Steel | POSCO Holdings vs. Outokumpu Oyj ADR | POSCO Holdings vs. Ternium SA ADR | POSCO Holdings vs. Steel Dynamics |
| Almaden Minerals vs. Antioquia Gold | Almaden Minerals vs. Asante Gold | Almaden Minerals vs. Bluestone Resources | Almaden Minerals vs. Big Ridge Gold |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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