Correlation Between POSCO Holdings and Capitan Mining
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Capitan Mining 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 Capitan Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Capitan Mining, you can compare the effects of market volatilities on POSCO Holdings and Capitan Mining 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 Capitan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Capitan Mining.
Diversification Opportunities for POSCO Holdings and Capitan Mining
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Capitan is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Capitan Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitan Mining 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 Capitan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitan Mining has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Capitan Mining go up and down completely randomly.
Pair Corralation between POSCO Holdings and Capitan Mining
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Capitan Mining. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 3.28 times less risky than Capitan Mining. The stock trades about -0.08 of its potential returns per unit of risk. The Capitan Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Capitan Mining on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Capitan Mining or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Capitan Mining
Performance |
| Timeline |
| POSCO Holdings |
| Capitan Mining |
POSCO Holdings and Capitan Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Capitan Mining
The main advantage of trading using opposite POSCO Holdings and Capitan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Capitan Mining 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 Capitan Mining will offset losses from the drop in Capitan Mining's long position.| POSCO Holdings vs. Fortitude Gold Corp | POSCO Holdings vs. New Gold | POSCO Holdings vs. Galiano Gold | POSCO Holdings vs. GoldMining |
| Capitan Mining vs. Cartier Iron Corp | Capitan Mining vs. Alien Metals | Capitan Mining vs. Arctic Star Exploration | Capitan Mining vs. Denarius Silver Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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