Correlation Between POSCO Holdings and YASKAWA ELEC

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

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

Diversification Opportunities for POSCO Holdings and YASKAWA ELEC

-0.47

Correlation Coefficient

POSCO Holdings  YASKAWA ELEC

Very good diversification

The 3 months correlation between POSCO and YASKAWA is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and YASKAWA ELEC UNSP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YASKAWA ELEC UNSP 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 YASKAWA ELEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YASKAWA ELEC UNSP has no effect on the direction of POSCO Holdings i.e., POSCO Holdings and YASKAWA ELEC go up and down completely randomly.

Pair Corralation between POSCO Holdings and YASKAWA ELEC

Assuming the 90 days horizon POSCO Holdings is expected to generate 0.74 times more return on investment than YASKAWA ELEC. However, POSCO Holdings is 1.36 times less risky than YASKAWA ELEC. It trades about 0.16 of its potential returns per unit of risk. YASKAWA ELEC UNSP is currently generating about 0.04 per unit of risk. If you would invest  3,721  in POSCO Holdings on April 20, 2025 and sell it today you would earn a total of  979.00  from holding POSCO Holdings or generate 26.31% 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.  YASKAWA ELEC UNSP

POSCO Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in POSCO Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, POSCO Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

YASKAWA ELEC UNSP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YASKAWA ELEC UNSP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, YASKAWA ELEC may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with POSCO Holdings and YASKAWA ELEC

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

The idea behind POSCO Holdings and YASKAWA ELEC UNSP 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.