Correlation Between POSCO Holdings and Croghan Bancshares
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Croghan Bancshares 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 Croghan Bancshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Croghan Bancshares, you can compare the effects of market volatilities on POSCO Holdings and Croghan Bancshares 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 Croghan Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Croghan Bancshares.
Diversification Opportunities for POSCO Holdings and Croghan Bancshares
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Croghan is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Croghan Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Croghan Bancshares 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 Croghan Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Croghan Bancshares has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Croghan Bancshares go up and down completely randomly.
Pair Corralation between POSCO Holdings and Croghan Bancshares
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Croghan Bancshares. In addition to that, POSCO Holdings is 1.71 times more volatile than Croghan Bancshares. It trades about -0.1 of its total potential returns per unit of risk. Croghan Bancshares is currently generating about 0.05 per unit of volatility. If you would invest 4,391 in Croghan Bancshares on September 4, 2024 and sell it today you would earn a total of 599.00 from holding Croghan Bancshares or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 86.64% |
| Values | Daily Returns |
POSCO Holdings vs. Croghan Bancshares
Performance |
| Timeline |
| POSCO Holdings |
| Croghan Bancshares |
POSCO Holdings and Croghan Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Croghan Bancshares
The main advantage of trading using opposite POSCO Holdings and Croghan Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Croghan Bancshares 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 Croghan Bancshares will offset losses from the drop in Croghan Bancshares' 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 |
| Croghan Bancshares vs. Consol Energy | Croghan Bancshares vs. Dave Busters Entertainment | Croghan Bancshares vs. Xponential Fitness | Croghan Bancshares vs. Eldorado Gold 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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