Correlation Between Moatech and Posco ICT

Can any of the company-specific risk be diversified away by investing in both Moatech and Posco ICT 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 Moatech and Posco ICT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Moatech Co and Posco ICT, you can compare the effects of market volatilities on Moatech and Posco ICT 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 Moatech with a short position of Posco ICT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moatech and Posco ICT.

Diversification Opportunities for Moatech and Posco ICT

-0.36

Correlation Coefficient

Moatech  Posco ICT

Very good diversification

The 3 months correlation between Moatech and Posco is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Moatech Co and Posco ICT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco ICT and Moatech 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 Moatech Co are associated (or correlated) with Posco ICT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posco ICT has no effect on the direction of Moatech i.e., Moatech and Posco ICT go up and down completely randomly.

Pair Corralation between Moatech and Posco ICT

Assuming the 90 days trading horizon Moatech Co is expected to under-perform the Posco ICT. But the stock apears to be less risky and, when comparing its historical volatility, Moatech Co is 3.95 times less risky than Posco ICT. The stock trades about -0.11 of its potential returns per unit of risk. The Posco ICT is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,995,000  in Posco ICT on December 23, 2024 and sell it today you would earn a total of  765,000  from holding Posco ICT or generate 38.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Moatech Co  vs.  Posco ICT

Moatech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Moatech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Posco ICT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Posco ICT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Posco ICT sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Moatech and Posco ICT

The main advantage of trading using opposite Moatech and Posco ICT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moatech position performs unexpectedly, Posco ICT 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 ICT will offset losses from the drop in Posco ICT's long position.

The idea behind Moatech Co and Posco ICT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.