Correlation Between Dongnam Chemical and Kosdaq Composite
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By analyzing existing cross correlation between Dongnam Chemical Co and Kosdaq Composite Index, you can compare the effects of market volatilities on Dongnam Chemical and Kosdaq Composite 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 Dongnam Chemical with a short position of Kosdaq Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnam Chemical and Kosdaq Composite.
Diversification Opportunities for Dongnam Chemical and Kosdaq Composite
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dongnam and Kosdaq is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Dongnam Chemical Co and Kosdaq Composite Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kosdaq Composite Index and Dongnam Chemical 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 Dongnam Chemical Co are associated (or correlated) with Kosdaq Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kosdaq Composite Index has no effect on the direction of Dongnam Chemical i.e., Dongnam Chemical and Kosdaq Composite go up and down completely randomly.
Pair Corralation between Dongnam Chemical and Kosdaq Composite
Assuming the 90 days trading horizon Dongnam Chemical Co is expected to generate 0.8 times more return on investment than Kosdaq Composite. However, Dongnam Chemical Co is 1.26 times less risky than Kosdaq Composite. It trades about 0.47 of its potential returns per unit of risk. Kosdaq Composite Index is currently generating about 0.22 per unit of risk. If you would invest 3,105,626 in Dongnam Chemical Co on October 20, 2024 and sell it today you would earn a total of 319,374 from holding Dongnam Chemical Co or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnam Chemical Co vs. Kosdaq Composite Index
Performance |
| Timeline |
Dongnam Chemical and Kosdaq Composite Volatility Contrast
Predicted Return Density |
| Returns |
Dongnam Chemical Co
Pair trading matchups for Dongnam Chemical
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Pair Trading with Dongnam Chemical and Kosdaq Composite
The main advantage of trading using opposite Dongnam Chemical and Kosdaq Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnam Chemical position performs unexpectedly, Kosdaq Composite 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 Kosdaq Composite will offset losses from the drop in Kosdaq Composite's long position.| Dongnam Chemical vs. Kyeryong Construction Industrial | Dongnam Chemical vs. MediaZen | Dongnam Chemical vs. KCC Engineering Construction | Dongnam Chemical vs. MEDIANA CoLtd |
| Kosdaq Composite vs. E Investment Development | Kosdaq Composite vs. Youngbo Chemical Co | Kosdaq Composite vs. Dongnam Chemical Co | Kosdaq Composite vs. Hanwha Chemical Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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