Correlation Between POSCO Holdings and Atacado SA
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Atacado 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 Atacado 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 Atacado SA, you can compare the effects of market volatilities on POSCO Holdings and Atacado 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 Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Atacado SA.
Diversification Opportunities for POSCO Holdings and Atacado SA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POSCO and Atacado is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado 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 Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Atacado SA go up and down completely randomly.
Pair Corralation between POSCO Holdings and Atacado SA
Considering the 90-day investment horizon POSCO Holdings is expected to generate 46.69 times more return on investment than Atacado SA. However, POSCO Holdings is 46.69 times more volatile than Atacado SA. It trades about 0.01 of its potential returns per unit of risk. Atacado SA is currently generating about 0.14 per unit of risk. If you would invest 5,296 in POSCO Holdings on September 3, 2024 and sell it today you would lose (134.00) from holding POSCO Holdings or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 28.89% |
| Values | Daily Returns |
POSCO Holdings vs. Atacado SA
Performance |
| Timeline |
| POSCO Holdings |
| Atacado SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
POSCO Holdings and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Atacado SA
The main advantage of trading using opposite POSCO Holdings and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Atacado 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| POSCO Holdings vs. Olympic Steel | POSCO Holdings vs. Universal Stainless Alloy | POSCO Holdings vs. Outokumpu Oyj ADR | POSCO Holdings vs. Ternium SA ADR |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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