Correlation Between XXL Energy and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both XXL Energy 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 XXL Energy and POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XXL Energy Corp and POSCO Holdings, you can compare the effects of market volatilities on XXL Energy 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 XXL Energy with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of XXL Energy and POSCO Holdings.
Diversification Opportunities for XXL Energy and POSCO Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XXL and POSCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding XXL Energy Corp and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and XXL Energy 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 XXL Energy Corp 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 XXL Energy i.e., XXL Energy and POSCO Holdings go up and down completely randomly.
Pair Corralation between XXL Energy and POSCO Holdings
Assuming the 90 days horizon XXL Energy Corp is expected to under-perform the POSCO Holdings. In addition to that, XXL Energy is 2.04 times more volatile than POSCO Holdings. It trades about -0.02 of its total potential returns per unit of risk. POSCO Holdings is currently generating about 0.01 per unit of volatility. If you would invest 5,294 in POSCO Holdings on September 12, 2024 and sell it today you would lose (533.50) from holding POSCO Holdings or give up 10.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XXL Energy Corp vs. POSCO Holdings
Performance |
| Timeline |
| XXL Energy Corp |
| POSCO Holdings |
XXL Energy and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XXL Energy and POSCO Holdings
The main advantage of trading using opposite XXL Energy and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XXL Energy 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.| XXL Energy vs. POSCO Holdings | XXL Energy vs. Schweizerische Nationalbank | XXL Energy vs. Berkshire Hathaway | XXL Energy vs. Berkshire Hathaway |
| POSCO Holdings vs. Olympic Steel | POSCO Holdings vs. Universal Stainless Alloy | POSCO Holdings vs. Outokumpu Oyj ADR | POSCO Holdings vs. Ternium SA ADR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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