Correlation Between POSCO Holdings and Supernova Energy
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Supernova Energy 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 Supernova Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Supernova Energy, you can compare the effects of market volatilities on POSCO Holdings and Supernova Energy 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 Supernova Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Supernova Energy.
Diversification Opportunities for POSCO Holdings and Supernova Energy
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POSCO and Supernova is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Supernova Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supernova Energy 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 Supernova Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supernova Energy has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Supernova Energy go up and down completely randomly.
Pair Corralation between POSCO Holdings and Supernova Energy
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Supernova Energy. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 5.85 times less risky than Supernova Energy. The stock trades about -0.08 of its potential returns per unit of risk. The Supernova Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.40 in Supernova Energy on September 12, 2024 and sell it today you would lose (0.37) from holding Supernova Energy or give up 92.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
POSCO Holdings vs. Supernova Energy
Performance |
| Timeline |
| POSCO Holdings |
| Supernova Energy |
POSCO Holdings and Supernova Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Supernova Energy
The main advantage of trading using opposite POSCO Holdings and Supernova Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Supernova Energy 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 Supernova Energy will offset losses from the drop in Supernova Energy'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 |
| Supernova Energy vs. POSCO Holdings | Supernova Energy vs. Schweizerische Nationalbank | Supernova Energy vs. Berkshire Hathaway | Supernova Energy 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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