Correlation Between Usinas Siderurgicas and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Usinas Siderurgicas and POSCO Holdings 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 Usinas Siderurgicas and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Usinas Siderurgicas de and POSCO Holdings, you can compare the effects of market volatilities on Usinas Siderurgicas and POSCO Holdings 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 Usinas Siderurgicas with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Usinas Siderurgicas and POSCO Holdings.
Diversification Opportunities for Usinas Siderurgicas and POSCO Holdings
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Usinas and POSCO is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Usinas Siderurgicas de and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Usinas Siderurgicas 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 Usinas Siderurgicas de are associated (or correlated) with POSCO Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSCO Holdings has no effect on the direction of Usinas Siderurgicas i.e., Usinas Siderurgicas and POSCO Holdings go up and down completely randomly.
Pair Corralation between Usinas Siderurgicas and POSCO Holdings
Assuming the 90 days horizon Usinas Siderurgicas de is expected to generate 3.1 times more return on investment than POSCO Holdings. However, Usinas Siderurgicas is 3.1 times more volatile than POSCO Holdings. It trades about 0.15 of its potential returns per unit of risk. POSCO Holdings is currently generating about 0.15 per unit of risk. If you would invest 91.00 in Usinas Siderurgicas de on November 3, 2024 and sell it today you would earn a total of 11.00 from holding Usinas Siderurgicas de or generate 12.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Usinas Siderurgicas de vs. POSCO Holdings
Performance |
| Timeline |
| Usinas Siderurgicas |
| POSCO Holdings |
Usinas Siderurgicas and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Usinas Siderurgicas and POSCO Holdings
The main advantage of trading using opposite Usinas Siderurgicas and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Usinas Siderurgicas position performs unexpectedly, POSCO Holdings 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 POSCO Holdings will offset losses from the drop in POSCO Holdings' long position.| Usinas Siderurgicas vs. Olympic Steel | Usinas Siderurgicas vs. Mesabi Trust | Usinas Siderurgicas vs. Outokumpu Oyj ADR | Usinas Siderurgicas vs. POSCO Holdings |
| POSCO Holdings vs. Olympic Steel | POSCO Holdings vs. Outokumpu Oyj ADR | POSCO Holdings vs. Ternium SA ADR | POSCO Holdings vs. Steel Dynamics |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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