Correlation Between Moadata and Posco ICT

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

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

Diversification Opportunities for Moadata and Posco ICT

0.13

Correlation Coefficient

Moadata  Posco ICT

Average diversification

The 3 months correlation between Moadata and Posco is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Moadata Co and Posco ICT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco ICT and Moadata 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 Moadata 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 Moadata i.e., Moadata and Posco ICT go up and down completely randomly.

Pair Corralation between Moadata and Posco ICT

Assuming the 90 days trading horizon Moadata Co is expected to generate 0.95 times more return on investment than Posco ICT. However, Moadata Co is 1.05 times less risky than Posco ICT. It trades about 0.02 of its potential returns per unit of risk. Posco ICT is currently generating about -0.16 per unit of risk. If you would invest  145,000  in Moadata Co on September 4, 2024 and sell it today you would earn a total of  2,500  from holding Moadata Co or generate 1.72% return on investment over 90 days.

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

Moadata Co  vs.  Posco ICT

Moadata

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Moadata Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Moadata is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Posco ICT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Posco ICT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Moadata and Posco ICT

The main advantage of trading using opposite Moadata and Posco ICT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moadata 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 Moadata 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..