Correlation Between POSCO Holdings and Kyung-In Synthetic

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

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

Diversification Opportunities for POSCO Holdings and Kyung-In Synthetic

0.92

Correlation Coefficient

POSCO Holdings  Kyung-In Synthetic

Almost no diversification

The 3 months correlation between POSCO and Kyung-In is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and Kyung In Synthetic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyung In Synthetic 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 Kyung-In Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyung In Synthetic has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and Kyung-In Synthetic go up and down completely randomly.

Pair Corralation between POSCO Holdings and Kyung-In Synthetic

Assuming the 90 days trading horizon POSCO Holdings is expected to under-perform the Kyung-In Synthetic. In addition to that, POSCO Holdings is 1.73 times more volatile than Kyung In Synthetic Corp. It trades about -0.15 of its total potential returns per unit of risk. Kyung In Synthetic Corp is currently generating about -0.15 per unit of volatility. If you would invest  314,500  in Kyung In Synthetic Corp on September 12, 2024 and sell it today you would lose (44,000) from holding Kyung In Synthetic Corp or give up 13.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

POSCO Holdings  vs.  Kyung In Synthetic Corp

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. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Kyung In Synthetic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kyung In Synthetic Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat 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.

Pair Trading with POSCO Holdings and Kyung-In Synthetic

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

The idea behind POSCO Holdings and Kyung In Synthetic Corp 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.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.