Correlation Between POSCO Holdings and Sonoro Gold
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Sonoro Gold 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 Sonoro Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Sonoro Gold Corp, you can compare the effects of market volatilities on POSCO Holdings and Sonoro Gold 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 Sonoro Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Sonoro Gold.
Diversification Opportunities for POSCO Holdings and Sonoro Gold
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Sonoro is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Sonoro Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonoro Gold Corp 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 Sonoro Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonoro Gold Corp has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Sonoro Gold go up and down completely randomly.
Pair Corralation between POSCO Holdings and Sonoro Gold
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Sonoro Gold. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 3.19 times less risky than Sonoro Gold. The stock trades about -0.23 of its potential returns per unit of risk. The Sonoro Gold Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6.50 in Sonoro Gold Corp on August 29, 2024 and sell it today you would lose (0.10) from holding Sonoro Gold Corp or give up 1.54% 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. Sonoro Gold Corp
Performance |
| Timeline |
| POSCO Holdings |
| Sonoro Gold Corp |
POSCO Holdings and Sonoro Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Sonoro Gold
The main advantage of trading using opposite POSCO Holdings and Sonoro Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Sonoro Gold 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 Sonoro Gold will offset losses from the drop in Sonoro Gold's long position.The idea behind POSCO Holdings and Sonoro Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sonoro Gold vs. Morningstar Unconstrained Allocation | Sonoro Gold vs. High Yield Municipal Fund | Sonoro Gold vs. Knife River | Sonoro Gold vs. Klckner Co SE |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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