Correlation Between Kosdaq Composite and Samlip General
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By analyzing existing cross correlation between Kosdaq Composite Index and Samlip General Foods, you can compare the effects of market volatilities on Kosdaq Composite and Samlip General 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 Samlip General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Samlip General.
Diversification Opportunities for Kosdaq Composite and Samlip General
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kosdaq and Samlip is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Samlip General Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samlip General Foods 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 Samlip General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samlip General Foods has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Samlip General go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Samlip General
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Samlip General. In addition to that, Kosdaq Composite is 1.05 times more volatile than Samlip General Foods. It trades about -0.1 of its total potential returns per unit of risk. Samlip General Foods is currently generating about -0.09 per unit of volatility. If you would invest 5,740,000 in Samlip General Foods on September 3, 2024 and sell it today you would lose (1,030,000) from holding Samlip General Foods or give up 17.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Samlip General Foods
Performance |
| Timeline |
Kosdaq Composite and Samlip General Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Samlip General Foods
Pair trading matchups for Samlip General
Pair Trading with Kosdaq Composite and Samlip General
The main advantage of trading using opposite Kosdaq Composite and Samlip General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Samlip General 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 Samlip General will offset losses from the drop in Samlip General's long position.The idea behind Kosdaq Composite Index and Samlip General Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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