Correlation Between POSCO Holdings and Grayscale Litecoin Trust

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

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

Diversification Opportunities for POSCO Holdings and Grayscale Litecoin Trust

-0.62

Correlation Coefficient

POSCO Holdings  Grayscale Litecoin Trust

Excellent diversification

The 3 months correlation between POSCO and Grayscale is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Grayscale Litecoin Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Litecoin Trust 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 Grayscale Litecoin Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Litecoin Trust has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Grayscale Litecoin Trust go up and down completely randomly.

Pair Corralation between POSCO Holdings and Grayscale Litecoin Trust

Considering the 90-day investment horizon POSCO Holdings is expected to generate 0.4 times more return on investment than Grayscale Litecoin Trust. However, POSCO Holdings is 2.5 times less risky than Grayscale Litecoin Trust. It trades about 0.11 of its potential returns per unit of risk. Grayscale Litecoin Trust is currently generating about -0.09 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	Weak
Accuracy	100.0%
Values	Daily Returns

POSCO Holdings  vs.  Grayscale Litecoin Trust

POSCO Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in POSCO Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward-looking signals, POSCO Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Grayscale Litecoin Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grayscale Litecoin Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with POSCO Holdings and Grayscale Litecoin Trust

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

The idea behind POSCO Holdings and Grayscale Litecoin Trust 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.