Correlation Between POSCO Holdings and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Niagara Mohawk 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 Niagara Mohawk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Niagara Mohawk Power, you can compare the effects of market volatilities on POSCO Holdings and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Niagara Mohawk.
Diversification Opportunities for POSCO Holdings and Niagara Mohawk
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and Niagara is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Niagara Mohawk go up and down completely randomly.
Pair Corralation between POSCO Holdings and Niagara Mohawk
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Niagara Mohawk. In addition to that, POSCO Holdings is 4.66 times more volatile than Niagara Mohawk Power. It trades about -0.23 of its total potential returns per unit of risk. Niagara Mohawk Power is currently generating about -0.24 per unit of volatility. If you would invest 6,775 in Niagara Mohawk Power on September 1, 2024 and sell it today you would lose (215.00) from holding Niagara Mohawk Power or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Niagara Mohawk Power
Performance |
| Timeline |
| POSCO Holdings |
| Niagara Mohawk Power |
POSCO Holdings and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Niagara Mohawk
The main advantage of trading using opposite POSCO Holdings and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk's long position.| POSCO Holdings vs. Fortitude Gold Corp | POSCO Holdings vs. New Gold | POSCO Holdings vs. Galiano Gold | POSCO Holdings vs. GoldMining |
| Niagara Mohawk vs. Asure Software | Niagara Mohawk vs. Skechers USA | Niagara Mohawk vs. Under Armour C | Niagara Mohawk vs. Western Digital |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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