Correlation Between POSCO Holdings and San Juan
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and San Juan 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 San Juan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and San Juan Basin, you can compare the effects of market volatilities on POSCO Holdings and San Juan 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 San Juan. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and San Juan.
Diversification Opportunities for POSCO Holdings and San Juan
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and San is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and San Juan Basin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Juan Basin 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 San Juan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Juan Basin has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and San Juan go up and down completely randomly.
Pair Corralation between POSCO Holdings and San Juan
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the San Juan. In addition to that, POSCO Holdings is 1.09 times more volatile than San Juan Basin. It trades about -0.06 of its total potential returns per unit of risk. San Juan Basin is currently generating about -0.04 per unit of volatility. If you would invest 663.00 in San Juan Basin on September 12, 2024 and sell it today you would lose (258.00) from holding San Juan Basin or give up 38.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. San Juan Basin
Performance |
| Timeline |
| POSCO Holdings |
| San Juan Basin |
POSCO Holdings and San Juan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and San Juan
The main advantage of trading using opposite POSCO Holdings and San Juan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, San Juan 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 San Juan will offset losses from the drop in San Juan'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 |
| San Juan vs. POSCO Holdings | San Juan vs. Schweizerische Nationalbank | San Juan vs. Berkshire Hathaway | San Juan vs. Berkshire Hathaway |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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