Correlation Between Kosdaq Composite and POSCO Holdings
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By analyzing existing cross correlation between Kosdaq Composite Index and POSCO Holdings, you can compare the effects of market volatilities on Kosdaq Composite and POSCO Holdings 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 Kosdaq Composite with a short position of POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and POSCO Holdings.
Diversification Opportunities for Kosdaq Composite and POSCO Holdings
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and POSCO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings and Kosdaq Composite 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 Kosdaq Composite Index are associated (or correlated) with POSCO Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSCO Holdings has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and POSCO Holdings go up and down completely randomly.
Pair Corralation between Kosdaq Composite and POSCO Holdings
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.44 times more return on investment than POSCO Holdings. However, Kosdaq Composite Index is 2.27 times less risky than POSCO Holdings. It trades about -0.16 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.17 per unit of risk. If you would invest 74,048 in Kosdaq Composite Index on August 28, 2024 and sell it today you would lose (4,217) from holding Kosdaq Composite Index or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. POSCO Holdings
Performance |
| Timeline |
Kosdaq Composite and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
POSCO Holdings
Pair trading matchups for POSCO Holdings
Pair Trading with Kosdaq Composite and POSCO Holdings
The main advantage of trading using opposite Kosdaq Composite and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, POSCO Holdings 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 POSCO Holdings will offset losses from the drop in POSCO Holdings' long position.| Kosdaq Composite vs. Shinil Electronics Co | Kosdaq Composite vs. Sungdo Engineering Construction | Kosdaq Composite vs. Seoul Electronics Telecom | Kosdaq Composite vs. ENERGYMACHINERY KOREA CoLtd |
| POSCO Holdings vs. Top Material Co | POSCO Holdings vs. LS Materials | POSCO Holdings vs. Nable Communications | POSCO Holdings vs. SK Telecom Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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