Correlation Between POSCO Holdings and Surge Energy
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Surge 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 Surge 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 Surge Energy, you can compare the effects of market volatilities on POSCO Holdings and Surge 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 Surge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Surge Energy.
Diversification Opportunities for POSCO Holdings and Surge Energy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between POSCO and Surge is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Surge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge 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 Surge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Energy has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Surge Energy go up and down completely randomly.
Pair Corralation between POSCO Holdings and Surge Energy
Considering the 90-day investment horizon POSCO Holdings is expected to generate 572.13 times less return on investment than Surge Energy. But when comparing it to its historical volatility, POSCO Holdings is 1.33 times less risky than Surge Energy. It trades about 0.0 of its potential returns per unit of risk. Surge Energy is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 346.00 in Surge Energy on October 20, 2024 and sell it today you would earn a total of 63.00 from holding Surge Energy or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. Surge Energy
Performance |
| Timeline |
| POSCO Holdings |
| Surge Energy |
POSCO Holdings and Surge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and Surge Energy
The main advantage of trading using opposite POSCO Holdings and Surge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Surge 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 Surge Energy will offset losses from the drop in Surge 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 |
| Surge Energy vs. Petro Viking Energy | Surge Energy vs. Parex Resources | Surge Energy vs. Razor Energy Corp | Surge Energy vs. Prospera Energy |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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