Correlation Between POSCO Holdings and Vista Gold
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Vista 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 Vista 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 Vista Gold, you can compare the effects of market volatilities on POSCO Holdings and Vista 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 Vista Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Vista Gold.
Diversification Opportunities for POSCO Holdings and Vista Gold
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between POSCO and Vista is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Vista Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Gold 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 Vista Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Gold has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Vista Gold go up and down completely randomly.
Pair Corralation between POSCO Holdings and Vista Gold
Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the Vista Gold. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.46 times less risky than Vista Gold. The stock trades about -0.01 of its potential returns per unit of risk. The Vista Gold is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Vista Gold on October 22, 2024 and sell it today you would lose 0.00 from holding Vista Gold or give up 0.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Vista Gold
Performance |
| Timeline |
| POSCO Holdings |
| Vista Gold |
POSCO Holdings and Vista Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Vista Gold
The main advantage of trading using opposite POSCO Holdings and Vista Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Vista 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 Vista Gold will offset losses from the drop in Vista Gold'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 |
| Vista Gold vs. International Tower Hill | Vista Gold vs. Harmony Gold Mining | Vista Gold vs. Seabridge Gold | Vista Gold vs. IAMGold |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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