Correlation Between Union Materials and Kosdaq Composite
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By analyzing existing cross correlation between Union Materials Corp and Kosdaq Composite Index, you can compare the effects of market volatilities on Union Materials 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 Union Materials with a short position of Kosdaq Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Union Materials and Kosdaq Composite.
Diversification Opportunities for Union Materials and Kosdaq Composite
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Union and Kosdaq is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Union Materials Corp 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 Union Materials 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 Union Materials Corp 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 Union Materials i.e., Union Materials and Kosdaq Composite go up and down completely randomly.
Pair Corralation between Union Materials and Kosdaq Composite
Assuming the 90 days trading horizon Union Materials Corp is expected to generate 1.47 times more return on investment than Kosdaq Composite. However, Union Materials is 1.47 times more volatile than Kosdaq Composite Index. It trades about 0.09 of its potential returns per unit of risk. Kosdaq Composite Index is currently generating about 0.11 per unit of risk. If you would invest 234,000 in Union Materials Corp on October 16, 2024 and sell it today you would earn a total of 7,000 from holding Union Materials Corp or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Union Materials Corp vs. Kosdaq Composite Index
Performance |
| Timeline |
Union Materials and Kosdaq Composite Volatility Contrast
Predicted Return Density |
| Returns |
Union Materials Corp
Pair trading matchups for Union Materials
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Pair Trading with Union Materials and Kosdaq Composite
The main advantage of trading using opposite Union Materials and Kosdaq Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Union Materials 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.| Union Materials vs. Moadata Co | Union Materials vs. LS Materials | Union Materials vs. PI Advanced Materials | Union Materials vs. National Plastic Co |
| Kosdaq Composite vs. Hyosung Advanced Materials | Kosdaq Composite vs. Korea Alcohol Industrial | Kosdaq Composite vs. LAKE MATERIALS LTD | Kosdaq Composite vs. Union Materials 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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