Correlation Between POSCO Holdings and Haesung DS
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Haesung DS 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 Haesung DS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Haesung DS Co, you can compare the effects of market volatilities on POSCO Holdings and Haesung DS 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 Haesung DS. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Haesung DS.
Diversification Opportunities for POSCO Holdings and Haesung DS
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between POSCO and Haesung is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Haesung DS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung DS 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 Haesung DS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung DS has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Haesung DS go up and down completely randomly.
Pair Corralation between POSCO Holdings and Haesung DS
Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Haesung DS. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 1.45 times less risky than Haesung DS. The stock trades about -0.27 of its potential returns per unit of risk. The Haesung DS Co is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,225,000 in Haesung DS Co on September 25, 2024 and sell it today you would earn a total of 125,000 from holding Haesung DS Co or generate 5.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
POSCO Holdings vs. Haesung DS Co
Performance |
Timeline |
POSCO Holdings |
Haesung DS |
POSCO Holdings and Haesung DS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with POSCO Holdings and Haesung DS
The main advantage of trading using opposite POSCO Holdings and Haesung DS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Haesung DS 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 Haesung DS will offset losses from the drop in Haesung DS's long position.POSCO Holdings vs. LG Chemicals | POSCO Holdings vs. Hanwha Solutions | POSCO Holdings vs. Lotte Chemical Corp | POSCO Holdings vs. Hyundai Steel |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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