Correlation Between POSCO Holdings and PUMA SE
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and PUMA SE 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 PUMA SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and PUMA SE, you can compare the effects of market volatilities on POSCO Holdings and PUMA SE 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 PUMA SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and PUMA SE.
Diversification Opportunities for POSCO Holdings and PUMA SE
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and PUMA is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and PUMA SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUMA SE 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 PUMA SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUMA SE has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and PUMA SE go up and down completely randomly.
Pair Corralation between POSCO Holdings and PUMA SE
Considering the 90-day investment horizon POSCO Holdings is expected to generate 1.13 times more return on investment than PUMA SE. However, POSCO Holdings is 1.13 times more volatile than PUMA SE. It trades about 0.01 of its potential returns per unit of risk. PUMA SE is currently generating about -0.02 per unit of risk. If you would invest 5,660 in POSCO Holdings on August 31, 2024 and sell it today you would lose (498.00) from holding POSCO Holdings or give up 8.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
POSCO Holdings vs. PUMA SE
Performance |
| Timeline |
| POSCO Holdings |
| PUMA SE |
POSCO Holdings and PUMA SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and PUMA SE
The main advantage of trading using opposite POSCO Holdings and PUMA SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, PUMA SE 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 PUMA SE will offset losses from the drop in PUMA SE's long position.| POSCO Holdings vs. Nucor Corp | POSCO Holdings vs. Steel Dynamics | POSCO Holdings vs. ArcelorMittal SA ADR | POSCO Holdings vs. Gerdau SA ADR |
| PUMA SE vs. Asics Corp ADR | PUMA SE vs. American Rebel Holdings | PUMA SE vs. American Rebel Holdings | PUMA SE vs. Crocs Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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