Correlation Between POSCO Holdings and GBX International

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

By analyzing existing cross correlation between POSCO Holdings and GBX International Group, you can compare the effects of market volatilities on POSCO Holdings and GBX International 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 GBX International. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and GBX International.

Diversification Opportunities for POSCO Holdings and GBX International

-0.68

Correlation Coefficient

POSCO Holdings  GBX International

Excellent diversification

The 3 months correlation between POSCO and GBX is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and GBX International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GBX International 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 GBX International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GBX International has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and GBX International go up and down completely randomly.

Pair Corralation between POSCO Holdings and GBX International

Considering the 90-day investment horizon POSCO Holdings is expected to under-perform the GBX International. But the stock apears to be less risky and, when comparing its historical volatility, POSCO Holdings is 41.73 times less risky than GBX International. The stock trades about -0.11 of its potential returns per unit of risk. The GBX International Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.01  in GBX International Group on September 23, 2024 and sell it today you would earn a total of  0.01  from holding GBX International Group or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.63%
Values	Daily Returns

POSCO Holdings  vs.  GBX International Group

POSCO Holdings

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's forward-looking signals remain fairly 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.

GBX International

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GBX International Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, GBX International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with POSCO Holdings and GBX International

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

The idea behind POSCO Holdings and GBX International Group 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.