Correlation Between Kosdaq Composite and Bookook Steel
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By analyzing existing cross correlation between Kosdaq Composite Index and Bookook Steel, you can compare the effects of market volatilities on Kosdaq Composite and Bookook 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 Bookook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Bookook Steel.
Diversification Opportunities for Kosdaq Composite and Bookook Steel
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kosdaq and Bookook is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Bookook Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bookook 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 Bookook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bookook Steel has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Bookook Steel go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Bookook Steel
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Bookook Steel. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.15 times less risky than Bookook Steel. The index trades about -0.24 of its potential returns per unit of risk. The Bookook Steel is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 245,500 in Bookook Steel on August 25, 2024 and sell it today you would lose (4,500) from holding Bookook Steel or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Bookook Steel
Performance |
| Timeline |
Kosdaq Composite and Bookook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Bookook Steel
Pair trading matchups for Bookook Steel
Pair Trading with Kosdaq Composite and Bookook Steel
The main advantage of trading using opposite Kosdaq Composite and Bookook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Bookook 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 Bookook Steel will offset losses from the drop in Bookook Steel's long position.| Kosdaq Composite vs. Nam Hwa Construction | Kosdaq Composite vs. Dongbang Ship Machinery | Kosdaq Composite vs. SEOJEON ELECTRIC MACHINERY | Kosdaq Composite vs. Heungkuk Metaltech CoLtd |
| Bookook Steel vs. Dong Il Steel | Bookook Steel vs. Seah Steel Corp | Bookook Steel vs. Ajusteel Co | Bookook Steel vs. Samwon Steel |
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