Correlation Between Kosdaq Composite and Korea Steel
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By analyzing existing cross correlation between Kosdaq Composite Index and Korea Steel Co, you can compare the effects of market volatilities on Kosdaq Composite and Korea Steel 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 Korea Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Korea Steel.
Diversification Opportunities for Kosdaq Composite and Korea Steel
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kosdaq and Korea is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Korea Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Steel 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 Korea Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Steel has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Korea Steel go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Korea Steel
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.95 times more return on investment than Korea Steel. However, Kosdaq Composite Index is 1.05 times less risky than Korea Steel. It trades about -0.23 of its potential returns per unit of risk. Korea Steel Co is currently generating about -0.24 per unit of risk. If you would invest 73,819 in Kosdaq Composite Index on August 31, 2024 and sell it today you would lose (5,957) from holding Kosdaq Composite Index or give up 8.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Korea Steel Co
Performance |
| Timeline |
Kosdaq Composite and Korea Steel Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Korea Steel Co
Pair trading matchups for Korea Steel
Pair Trading with Kosdaq Composite and Korea Steel
The main advantage of trading using opposite Kosdaq Composite and Korea Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Korea Steel 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 Korea Steel will offset losses from the drop in Korea Steel's long position.| Kosdaq Composite vs. LG Chemicals | Kosdaq Composite vs. Sempio Foods Co | Kosdaq Composite vs. SK Chemicals Co | Kosdaq Composite vs. Korea Shipbuilding Offshore |
| Korea Steel vs. Dongbang Transport Logistics | Korea Steel vs. Sungmoon Electronics Co | Korea Steel vs. KyungIn Electronics Co | Korea Steel vs. Clean Science 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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