Correlation Between POSCO Holdings and NSTAR Electric
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and NSTAR Electric 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 NSTAR Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and NSTAR Electric, you can compare the effects of market volatilities on POSCO Holdings and NSTAR Electric 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 NSTAR Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and NSTAR Electric.
Diversification Opportunities for POSCO Holdings and NSTAR Electric
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and NSTAR is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and NSTAR Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR Electric 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 NSTAR Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR Electric has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and NSTAR Electric go up and down completely randomly.
Pair Corralation between POSCO Holdings and NSTAR Electric
If you would invest 8,350 in NSTAR Electric on September 4, 2024 and sell it today you would earn a total of 0.00 from holding NSTAR Electric or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
POSCO Holdings vs. NSTAR Electric
Performance |
| Timeline |
| POSCO Holdings |
| NSTAR Electric |
POSCO Holdings and NSTAR Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and NSTAR Electric
The main advantage of trading using opposite POSCO Holdings and NSTAR Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, NSTAR Electric 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 NSTAR Electric will offset losses from the drop in NSTAR Electric'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 |
| NSTAR Electric vs. Ameren Illinois | NSTAR Electric vs. The Connecticut Light | NSTAR Electric vs. Southern Company | NSTAR Electric vs. PacifiCorp |
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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