Correlation Between POSCO Holdings and Arlington Asset
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Arlington Asset 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 Arlington Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Arlington Asset Investment, you can compare the effects of market volatilities on POSCO Holdings and Arlington Asset 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 Arlington Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Arlington Asset.
Diversification Opportunities for POSCO Holdings and Arlington Asset
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between POSCO and Arlington is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Arlington Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arlington Asset Inve 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 Arlington Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arlington Asset Inve has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Arlington Asset go up and down completely randomly.
Pair Corralation between POSCO Holdings and Arlington Asset
If you would invest 469.00 in Arlington Asset Investment on September 6, 2024 and sell it today you would earn a total of 0.00 from holding Arlington Asset Investment or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 1.56% |
Values | Daily Returns |
POSCO Holdings vs. Arlington Asset Investment
Performance |
Timeline |
POSCO Holdings |
Arlington Asset Inve |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
POSCO Holdings and Arlington Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with POSCO Holdings and Arlington Asset
The main advantage of trading using opposite POSCO Holdings and Arlington Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Arlington Asset 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 Arlington Asset will offset losses from the drop in Arlington Asset's long position.POSCO Holdings vs. Constellium Nv | POSCO Holdings vs. Century Aluminum | POSCO Holdings vs. China Hongqiao Group | POSCO Holdings vs. Norsk Hydro ASA |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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