Correlation Between POSCO Holdings and Quaint Oak
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Quaint Oak 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 Quaint Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Quaint Oak Bancorp, you can compare the effects of market volatilities on POSCO Holdings and Quaint Oak 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 Quaint Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Quaint Oak.
Diversification Opportunities for POSCO Holdings and Quaint Oak
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Quaint is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Quaint Oak Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaint Oak Bancorp 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 Quaint Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaint Oak Bancorp has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Quaint Oak go up and down completely randomly.
Pair Corralation between POSCO Holdings and Quaint Oak
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Quaint Oak. In addition to that, POSCO Holdings is 6.49 times more volatile than Quaint Oak Bancorp. It trades about -0.3 of its total potential returns per unit of risk. Quaint Oak Bancorp is currently generating about -0.17 per unit of volatility. If you would invest 1,121 in Quaint Oak Bancorp on September 3, 2024 and sell it today you would lose (17.00) from holding Quaint Oak Bancorp or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Quaint Oak Bancorp
Performance |
| Timeline |
| POSCO Holdings |
| Quaint Oak Bancorp |
POSCO Holdings and Quaint Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Quaint Oak
The main advantage of trading using opposite POSCO Holdings and Quaint Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Quaint Oak 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 Quaint Oak will offset losses from the drop in Quaint Oak'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 |
| Quaint Oak vs. Home Federal Bancorp | Quaint Oak vs. Community West Bancshares | Quaint Oak vs. Magyar Bancorp | Quaint Oak vs. IF Bancorp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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