Correlation Between POSCO Thainox and Ingress Industrial

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

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

Diversification Opportunities for POSCO Thainox and Ingress Industrial

0.96

Correlation Coefficient

POSCO Thainox  Ingress Industrial

Almost no diversification

The 3 months correlation between POSCO and Ingress is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Thainox Public and Ingress Industrial Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingress Industrial Public and POSCO Thainox 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 Thainox Public are associated (or correlated) with Ingress Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingress Industrial Public has no effect on the direction of POSCO Thainox i.e., POSCO Thainox and Ingress Industrial go up and down completely randomly.

Pair Corralation between POSCO Thainox and Ingress Industrial

Assuming the 90 days trading horizon POSCO Thainox Public is expected to generate 1.0 times more return on investment than Ingress Industrial. However, POSCO Thainox Public is 1.0 times less risky than Ingress Industrial. It trades about 0.12 of its potential returns per unit of risk. Ingress Industrial Public is currently generating about 0.12 per unit of risk. If you would invest  0.00  in POSCO Thainox Public on September 3, 2024 and sell it today you would earn a total of  50.00  from holding POSCO Thainox Public or generate 9.223372036854776E16% return on investment over 90 days.

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

POSCO Thainox Public  vs.  Ingress Industrial Public

POSCO Thainox Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in POSCO Thainox Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, POSCO Thainox disclosed solid returns over the last few months and may actually be approaching a breakup point.

Ingress Industrial Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ingress Industrial Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Ingress Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with POSCO Thainox and Ingress Industrial

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

The idea behind POSCO Thainox Public and Ingress Industrial Public 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .