Correlation Between Kosdaq Composite and Hwacheon Machinery
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By analyzing existing cross correlation between Kosdaq Composite Index and Hwacheon Machinery Co, you can compare the effects of market volatilities on Kosdaq Composite and Hwacheon Machinery 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 Hwacheon Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Hwacheon Machinery.
Diversification Opportunities for Kosdaq Composite and Hwacheon Machinery
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kosdaq and Hwacheon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Hwacheon Machinery Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwacheon Machinery 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 Hwacheon Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwacheon Machinery has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Hwacheon Machinery go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Hwacheon Machinery
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Hwacheon Machinery. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 2.4 times less risky than Hwacheon Machinery. The index trades about -0.17 of its potential returns per unit of risk. The Hwacheon Machinery Co is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 285,000 in Hwacheon Machinery Co on August 28, 2024 and sell it today you would lose (19,000) from holding Hwacheon Machinery Co or give up 6.67% 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. Hwacheon Machinery Co
Performance |
| Timeline |
Kosdaq Composite and Hwacheon Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Hwacheon Machinery Co
Pair trading matchups for Hwacheon Machinery
Pair Trading with Kosdaq Composite and Hwacheon Machinery
The main advantage of trading using opposite Kosdaq Composite and Hwacheon Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Hwacheon Machinery 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 Hwacheon Machinery will offset losses from the drop in Hwacheon Machinery's long position.| Kosdaq Composite vs. Daejung Chemicals Metals | Kosdaq Composite vs. LG Household Healthcare | Kosdaq Composite vs. Cuckoo Homesys Co | Kosdaq Composite vs. Osang Healthcare Co,Ltd |
| Hwacheon Machinery vs. AptaBio Therapeutics | Hwacheon Machinery vs. Daewoo SBI SPAC | Hwacheon Machinery vs. Dream Security co | Hwacheon Machinery vs. Microfriend |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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