Correlation Between POSCO Holdings and US Nuclear
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and US Nuclear 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 US Nuclear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and US Nuclear Corp, you can compare the effects of market volatilities on POSCO Holdings and US Nuclear 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 US Nuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and US Nuclear.
Diversification Opportunities for POSCO Holdings and US Nuclear
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POSCO and UCLE is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and US Nuclear Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Nuclear 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 US Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Nuclear Corp has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and US Nuclear go up and down completely randomly.
Pair Corralation between POSCO Holdings and US Nuclear
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the US Nuclear. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 36.23 times less risky than US Nuclear. The stock trades about -0.09 of its potential returns per unit of risk. The US Nuclear Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 8.50 in US Nuclear Corp on August 24, 2024 and sell it today you would earn a total of 5.50 from holding US Nuclear Corp or generate 64.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. US Nuclear Corp
Performance |
| Timeline |
| POSCO Holdings |
| US Nuclear Corp |
POSCO Holdings and US Nuclear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and US Nuclear
The main advantage of trading using opposite POSCO Holdings and US Nuclear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, US Nuclear 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 US Nuclear will offset losses from the drop in US Nuclear'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 |
| US Nuclear vs. Keyence | US Nuclear vs. Garmin | US Nuclear vs. Keysight Technologies | US Nuclear vs. Fortive Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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