Correlation Between Dongil Metal and Kosdaq Composite
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By analyzing existing cross correlation between Dongil Metal Co and Kosdaq Composite Index, you can compare the effects of market volatilities on Dongil Metal 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 Dongil Metal with a short position of Kosdaq Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Metal and Kosdaq Composite.
Diversification Opportunities for Dongil Metal and Kosdaq Composite
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongil and Kosdaq is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Metal 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 Dongil Metal 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 Dongil Metal 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 Dongil Metal i.e., Dongil Metal and Kosdaq Composite go up and down completely randomly.
Pair Corralation between Dongil Metal and Kosdaq Composite
Assuming the 90 days trading horizon Dongil Metal Co is expected to under-perform the Kosdaq Composite. In addition to that, Dongil Metal is 1.8 times more volatile than Kosdaq Composite Index. It trades about -0.11 of its total potential returns per unit of risk. Kosdaq Composite Index is currently generating about -0.03 per unit of volatility. If you would invest 84,228 in Kosdaq Composite Index on August 29, 2024 and sell it today you would lose (15,015) from holding Kosdaq Composite Index or give up 17.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.6% |
Values | Daily Returns |
Dongil Metal Co vs. Kosdaq Composite Index
Performance |
Timeline |
Dongil Metal and Kosdaq Composite Volatility Contrast
Predicted Return Density |
Returns |
Dongil Metal Co
Pair trading matchups for Dongil Metal
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Pair Trading with Dongil Metal and Kosdaq Composite
The main advantage of trading using opposite Dongil Metal and Kosdaq Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Metal 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.Dongil Metal vs. LG Chemicals | Dongil Metal vs. Lotte Chemical Corp | Dongil Metal vs. Hyundai Steel | Dongil Metal vs. Seah Steel Corp |
Kosdaq Composite vs. Shinil Electronics Co | Kosdaq Composite vs. Sungdo Engineering Construction | Kosdaq Composite vs. Seoul Electronics Telecom | Kosdaq Composite vs. ENERGYMACHINERY KOREA CoLtd |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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