Correlation Between POSCO Holdings and Hyundai
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings and Hyundai 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 Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and Hyundai Motor Co, you can compare the effects of market volatilities on POSCO Holdings and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and Hyundai.
Diversification Opportunities for POSCO Holdings and Hyundai
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between POSCO and Hyundai is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Hyundai Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Hyundai go up and down completely randomly.
Pair Corralation between POSCO Holdings and Hyundai
Considering the 90-day investment horizon POSCO Holdings is expected to generate 1.06 times more return on investment than Hyundai. However, POSCO Holdings is 1.06 times more volatile than Hyundai Motor Co. It trades about 0.11 of its potential returns per unit of risk. Hyundai Motor Co is currently generating about 0.03 per unit of risk. If you would invest 4,330 in POSCO Holdings on December 28, 2024 and sell it today you would earn a total of 742.00 from holding POSCO Holdings or generate 17.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
POSCO Holdings vs. Hyundai Motor Co
Performance |
Timeline |
POSCO Holdings |
Hyundai Motor |
POSCO Holdings and Hyundai Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with POSCO Holdings and Hyundai
The main advantage of trading using opposite POSCO Holdings and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |