Correlation Between POSCO Holdings and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Safestore Holdings 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 Safestore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Safestore Holdings plc, you can compare the effects of market volatilities on POSCO Holdings and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Safestore Holdings.
Diversification Opportunities for POSCO Holdings and Safestore Holdings
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between POSCO and Safestore is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Safestore Holdings go up and down completely randomly.
Pair Corralation between POSCO Holdings and Safestore Holdings
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Safestore Holdings. In addition to that, POSCO Holdings is 1.31 times more volatile than Safestore Holdings plc. It trades about -0.1 of its total potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.02 per unit of volatility. If you would invest 985.00 in Safestore Holdings plc on September 3, 2024 and sell it today you would lose (69.00) from holding Safestore Holdings plc or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Safestore Holdings plc
Performance |
| Timeline |
| POSCO Holdings |
| Safestore Holdings plc |
POSCO Holdings and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Safestore Holdings
The main advantage of trading using opposite POSCO Holdings and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' 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 |
| Safestore Holdings vs. Apple Inc | Safestore Holdings vs. Microsoft | Safestore Holdings vs. Amazon Inc | Safestore Holdings vs. Alphabet Inc Class C |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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