Correlation Between Haesung Industrial and Kosdaq Composite
Can any of the company-specific risk be diversified away by investing in both Haesung Industrial and Kosdaq Composite 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 Haesung Industrial and Kosdaq Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haesung Industrial Co and Kosdaq Composite Index, you can compare the effects of market volatilities on Haesung Industrial 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 Haesung Industrial with a short position of Kosdaq Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haesung Industrial and Kosdaq Composite.
Diversification Opportunities for Haesung Industrial and Kosdaq Composite
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Haesung and Kosdaq is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial 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 Haesung Industrial i.e., Haesung Industrial and Kosdaq Composite go up and down completely randomly.
Pair Corralation between Haesung Industrial and Kosdaq Composite
Assuming the 90 days trading horizon Haesung Industrial Co is expected to under-perform the Kosdaq Composite. But the stock apears to be less risky and, when comparing its historical volatility, Haesung Industrial Co is 1.03 times less risky than Kosdaq Composite. The stock trades about -0.27 of its potential returns per unit of risk. The Kosdaq Composite Index is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 74,418 in Kosdaq Composite Index on August 30, 2024 and sell it today you would lose (4,979) from holding Kosdaq Composite Index or give up 6.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haesung Industrial Co vs. Kosdaq Composite Index
Performance |
| Timeline |
Haesung Industrial and Kosdaq Composite Volatility Contrast
Predicted Return Density |
| Returns |
Haesung Industrial Co
Pair trading matchups for Haesung Industrial
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Pair Trading with Haesung Industrial and Kosdaq Composite
The main advantage of trading using opposite Haesung Industrial and Kosdaq Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haesung Industrial 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.| Haesung Industrial vs. Moadata Co | Haesung Industrial vs. Dongbang Transport Logistics | Haesung Industrial vs. Daou Data Corp | Haesung Industrial vs. Hanjoo Light Metal |
| Kosdaq Composite vs. BGF Retail Co | Kosdaq Composite vs. Chin Yang Chemical | Kosdaq Composite vs. Daehan Synthetic Fiber | Kosdaq Composite vs. Pungguk Ethanol Industrial |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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