Correlation Between POSCO Holdings and Southern Silver
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Southern Silver 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 Southern Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Southern Silver Exploration, you can compare the effects of market volatilities on POSCO Holdings and Southern Silver 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 Southern Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Southern Silver.
Diversification Opportunities for POSCO Holdings and Southern Silver
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between POSCO and Southern is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Southern Silver Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Silver Expl 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 Southern Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Silver Expl has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Southern Silver go up and down completely randomly.
Pair Corralation between POSCO Holdings and Southern Silver
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Southern Silver. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 2.77 times less risky than Southern Silver. The stock trades about -0.07 of its potential returns per unit of risk. The Southern Silver Exploration is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Southern Silver Exploration on November 28, 2024 and sell it today you would lose (4.00) from holding Southern Silver Exploration or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Southern Silver Exploration
Performance |
| Timeline |
| POSCO Holdings |
| Southern Silver Expl |
POSCO Holdings and Southern Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Southern Silver
The main advantage of trading using opposite POSCO Holdings and Southern Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Southern Silver 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 Southern Silver will offset losses from the drop in Southern Silver's long position.| POSCO Holdings vs. Olympic Steel | POSCO Holdings vs. Outokumpu Oyj ADR | POSCO Holdings vs. Ternium SA ADR | POSCO Holdings vs. Steel Dynamics |
| Southern Silver vs. Summa Silver Corp | Southern Silver vs. GoGold Resources | Southern Silver vs. Austral Gold Limited | Southern Silver vs. Clean Air Metals |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |