Correlation Between Kosdaq Composite and Iljin Display
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By analyzing existing cross correlation between Kosdaq Composite Index and Iljin Display, you can compare the effects of market volatilities on Kosdaq Composite and Iljin Display 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 Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Iljin Display.
Diversification Opportunities for Kosdaq Composite and Iljin Display
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and Iljin is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display 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 Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Iljin Display go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Iljin Display
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Iljin Display. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.76 times less risky than Iljin Display. The index trades about -0.08 of its potential returns per unit of risk. The Iljin Display is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 100,400 in Iljin Display on August 25, 2024 and sell it today you would lose (16,100) from holding Iljin Display or give up 16.04% 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. Iljin Display
Performance |
| Timeline |
Kosdaq Composite and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Iljin Display
Pair trading matchups for Iljin Display
Pair Trading with Kosdaq Composite and Iljin Display
The main advantage of trading using opposite Kosdaq Composite and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Iljin Display 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 Iljin Display will offset losses from the drop in Iljin Display's long position.| Kosdaq Composite vs. Kbi Metal Co | Kosdaq Composite vs. Shinsung Delta Tech | Kosdaq Composite vs. Woori Technology | Kosdaq Composite vs. Dongil Metal 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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