Correlation Between Dow Jones and KODEX K
Can any of the company-specific risk be diversified away by investing in both Dow Jones and KODEX K 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 Dow Jones and KODEX K into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and KODEX K Robot Active, you can compare the effects of market volatilities on Dow Jones and KODEX K 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 Dow Jones with a short position of KODEX K. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and KODEX K.
Diversification Opportunities for Dow Jones and KODEX K
Good diversification
The 3 months correlation between Dow and KODEX is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and KODEX K Robot Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KODEX K Robot and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with KODEX K. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KODEX K Robot has no effect on the direction of Dow Jones i.e., Dow Jones and KODEX K go up and down completely randomly.
Pair Corralation between Dow Jones and KODEX K
Assuming the 90 days trading horizon Dow Jones Industrial is expected to under-perform the KODEX K. But the index apears to be less risky and, when comparing its historical volatility, Dow Jones Industrial is 2.94 times less risky than KODEX K. The index trades about -0.01 of its potential returns per unit of risk. The KODEX K Robot Active is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,269,500 in KODEX K Robot Active on October 26, 2024 and sell it today you would earn a total of 126,000 from holding KODEX K Robot Active or generate 9.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Dow Jones Industrial vs. KODEX K Robot Active
Performance |
| Timeline |
Dow Jones and KODEX K Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
KODEX K Robot Active
Pair trading matchups for KODEX K
Pair Trading with Dow Jones and KODEX K
The main advantage of trading using opposite Dow Jones and KODEX K positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, KODEX K 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 KODEX K will offset losses from the drop in KODEX K's long position.| Dow Jones vs. Asure Software | Dow Jones vs. Amkor Technology | Dow Jones vs. Radcom | Dow Jones vs. Senmiao Technology |
| KODEX K vs. KODEX 200LONGKOSDAQ150SHORT Futures | KODEX K vs. KODEX K Renewable Energy | KODEX K vs. KODEX SP500TR | KODEX K vs. KODEX Metaverse Nasdaq |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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