Correlation Between POSCO Holdings and Commencement Bancorp
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Commencement Bancorp 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 Commencement Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Commencement Bancorp, you can compare the effects of market volatilities on POSCO Holdings and Commencement Bancorp 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 Commencement Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Commencement Bancorp.
Diversification Opportunities for POSCO Holdings and Commencement Bancorp
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Commencement is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Commencement Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commencement Bancorp 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 Commencement Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commencement Bancorp has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Commencement Bancorp go up and down completely randomly.
Pair Corralation between POSCO Holdings and Commencement Bancorp
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Commencement Bancorp. In addition to that, POSCO Holdings is 4.26 times more volatile than Commencement Bancorp. It trades about -0.13 of its total potential returns per unit of risk. Commencement Bancorp is currently generating about 0.1 per unit of volatility. If you would invest 1,255 in Commencement Bancorp on October 11, 2024 and sell it today you would earn a total of 10.00 from holding Commencement Bancorp or generate 0.8% 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. Commencement Bancorp
Performance |
| Timeline |
| POSCO Holdings |
| Commencement Bancorp |
POSCO Holdings and Commencement Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Commencement Bancorp
The main advantage of trading using opposite POSCO Holdings and Commencement Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Commencement Bancorp 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 Commencement Bancorp will offset losses from the drop in Commencement Bancorp'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 |
| Commencement Bancorp vs. Summit Bank Group | Commencement Bancorp vs. Pacific West Bancorp | Commencement Bancorp vs. Savi Financial | Commencement Bancorp vs. MNB Holdings 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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