Correlation Between Greenshift Corp and POSCO Holdings

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

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

Diversification Opportunities for Greenshift Corp and POSCO Holdings

-0.52

Correlation Coefficient

Greenshift Corp  POSCO Holdings

Excellent diversification

The 3 months correlation between Greenshift and POSCO is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Greenshift Corp and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Greenshift Corp 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 Greenshift 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 Greenshift Corp i.e., Greenshift Corp and POSCO Holdings go up and down completely randomly.

Pair Corralation between Greenshift Corp and POSCO Holdings

Given the investment horizon of 90 days Greenshift Corp is expected to generate 6.55 times more return on investment than POSCO Holdings. However, Greenshift Corp is 6.55 times more volatile than POSCO Holdings. It trades about 0.08 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.03 per unit of risk. If you would invest  2.80  in Greenshift Corp on December 4, 2024 and sell it today you would earn a total of  0.25  from holding Greenshift Corp or generate 8.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Greenshift Corp  vs.  POSCO Holdings

Greenshift Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Greenshift Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Greenshift Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

POSCO Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days POSCO Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, POSCO Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Greenshift Corp and POSCO Holdings

The main advantage of trading using opposite Greenshift Corp and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenshift Corp 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.

The idea behind Greenshift Corp and POSCO Holdings 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.