Correlation Between POSCO Holdings and Iron Road
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Iron Road 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 Iron Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Iron Road Limited, you can compare the effects of market volatilities on POSCO Holdings and Iron Road 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 Iron Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Iron Road.
Diversification Opportunities for POSCO Holdings and Iron Road
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Iron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Iron Road Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Road Limited 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 Iron Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Road Limited has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Iron Road go up and down completely randomly.
Pair Corralation between POSCO Holdings and Iron Road
If you would invest 3.46 in Iron Road Limited on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Iron Road Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Iron Road Limited
Performance |
| Timeline |
| POSCO Holdings |
| Iron Road Limited |
POSCO Holdings and Iron Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Iron Road
The main advantage of trading using opposite POSCO Holdings and Iron Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Iron Road 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 Iron Road will offset losses from the drop in Iron Road's long position.The idea behind POSCO Holdings and Iron Road Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Iron Road vs. Olympic Steel | Iron Road vs. Mesabi Trust | Iron Road vs. Universal Stainless Alloy | Iron Road vs. POSCO Holdings |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |