Correlation Between Cathedral Energy and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Cathedral 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 Cathedral 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 Cathedral Energy Services and POSCO Holdings, you can compare the effects of market volatilities on Cathedral 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 Cathedral Energy with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathedral Energy and POSCO Holdings.
Diversification Opportunities for Cathedral Energy and POSCO Holdings
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cathedral and POSCO is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cathedral Energy Services and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Cathedral 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 Cathedral Energy Services 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 Cathedral Energy i.e., Cathedral Energy and POSCO Holdings go up and down completely randomly.
Pair Corralation between Cathedral Energy and POSCO Holdings
Assuming the 90 days horizon Cathedral Energy Services is expected to under-perform the POSCO Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cathedral Energy Services is 1.51 times less risky than POSCO Holdings. The pink sheet trades about -0.16 of its potential returns per unit of risk. The POSCO Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,330 in POSCO Holdings on December 28, 2024 and sell it today you would earn a total of 542.00 from holding POSCO Holdings or generate 12.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 91.8% |
Values | Daily Returns |
Cathedral Energy Services vs. POSCO Holdings
Performance |
Timeline |
Cathedral Energy Services |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
POSCO Holdings |
Cathedral Energy and POSCO Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cathedral Energy and POSCO Holdings
The main advantage of trading using opposite Cathedral Energy and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathedral 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.Cathedral Energy vs. AKITA Drilling | Cathedral Energy vs. Archer Limited | Cathedral Energy vs. Seadrill Limited | Cathedral Energy vs. Nabors Industries |
POSCO Holdings vs. Constellium Nv | POSCO Holdings vs. Century Aluminum | POSCO Holdings vs. China Hongqiao Group | POSCO Holdings vs. Kaiser Aluminum |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |