Correlation Between GulfSlope Energy and POSCO Holdings

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

By analyzing existing cross correlation between GulfSlope Energy and POSCO Holdings, you can compare the effects of market volatilities on GulfSlope Energy and POSCO Holdings 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 GulfSlope Energy with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GulfSlope Energy and POSCO Holdings.

Diversification Opportunities for GulfSlope Energy and POSCO Holdings

0.0

Correlation Coefficient

GulfSlope Energy  POSCO Holdings

Pay attention - limited upside

The 3 months correlation between GulfSlope and POSCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GulfSlope Energy and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and GulfSlope Energy 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 GulfSlope Energy are associated (or correlated) with POSCO Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSCO Holdings has no effect on the direction of GulfSlope Energy i.e., GulfSlope Energy and POSCO Holdings go up and down completely randomly.

Pair Corralation between GulfSlope Energy and POSCO Holdings

If you would invest  0.01  in GulfSlope Energy on September 17, 2024 and sell it today you would earn a total of  0.00  from holding GulfSlope Energy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

GulfSlope Energy  vs.  POSCO Holdings

GulfSlope Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GulfSlope Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, GulfSlope Energy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 uncertain 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.

Pair Trading with GulfSlope Energy and POSCO Holdings

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

The idea behind GulfSlope Energy and POSCO Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.