Correlation Between Worthington Steel and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Worthington Steel 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 Worthington Steel and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worthington Steel and POSCO Holdings, you can compare the effects of market volatilities on Worthington Steel 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 Worthington Steel with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worthington Steel and POSCO Holdings.
Diversification Opportunities for Worthington Steel and POSCO Holdings
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Worthington and POSCO is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Worthington Steel and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Worthington Steel 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 Worthington Steel 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 Worthington Steel i.e., Worthington Steel and POSCO Holdings go up and down completely randomly.
Pair Corralation between Worthington Steel and POSCO Holdings
Allowing for the 90-day total investment horizon Worthington Steel is expected to generate 1.19 times more return on investment than POSCO Holdings. However, Worthington Steel is 1.19 times more volatile than POSCO Holdings. It trades about 0.17 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.22 per unit of risk. If you would invest 3,963 in Worthington Steel on August 30, 2024 and sell it today you would earn a total of 506.00 from holding Worthington Steel or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worthington Steel vs. POSCO Holdings
Performance |
| Timeline |
| Worthington Steel |
| POSCO Holdings |
Worthington Steel and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worthington Steel and POSCO Holdings
The main advantage of trading using opposite Worthington Steel and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worthington Steel 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.| Worthington Steel vs. Universal Music Group | Worthington Steel vs. Nuvalent | Worthington Steel vs. Warner Music Group | Worthington Steel vs. Tencent Music Entertainment |
| POSCO Holdings vs. Franco Nevada | POSCO Holdings vs. Osisko Gold Ro | POSCO Holdings vs. Sandstorm Gold Ltd | POSCO Holdings vs. Royal Gold |
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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