Correlation Between POSCO Holdings and Petrus Resources
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Petrus Resources 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 Petrus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Petrus Resources, you can compare the effects of market volatilities on POSCO Holdings and Petrus Resources 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 Petrus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Petrus Resources.
Diversification Opportunities for POSCO Holdings and Petrus Resources
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between POSCO and Petrus is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Petrus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrus Resources 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 Petrus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrus Resources has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Petrus Resources go up and down completely randomly.
Pair Corralation between POSCO Holdings and Petrus Resources
Considering the 90-day investment horizon POSCO Holdings is expected to generate 0.93 times more return on investment than Petrus Resources. However, POSCO Holdings is 1.08 times less risky than Petrus Resources. It trades about 0.0 of its potential returns per unit of risk. Petrus Resources is currently generating about 0.0 per unit of risk. If you would invest 5,823 in POSCO Holdings on December 6, 2024 and sell it today you would lose (757.00) from holding POSCO Holdings or give up 13.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.49% |
| Values | Daily Returns |
POSCO Holdings vs. Petrus Resources
Performance |
| Timeline |
| POSCO Holdings |
| Petrus Resources |
POSCO Holdings and Petrus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Petrus Resources
The main advantage of trading using opposite POSCO Holdings and Petrus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Petrus Resources 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 Petrus Resources will offset losses from the drop in Petrus Resources' long position.| POSCO Holdings vs. Olympic Steel | POSCO Holdings vs. Outokumpu Oyj ADR | POSCO Holdings vs. Ternium SA ADR | POSCO Holdings vs. Steel Dynamics |
| Petrus Resources vs. FAR Limited | Petrus Resources vs. Valeura Energy | Petrus Resources vs. Epsilon Energy | Petrus Resources vs. PetroShale |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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