Correlation Between Kosdaq Composite and Kakao Corp
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By analyzing existing cross correlation between Kosdaq Composite Index and Kakao Corp, you can compare the effects of market volatilities on Kosdaq Composite and Kakao Corp 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 Kakao Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Kakao Corp.
Diversification Opportunities for Kosdaq Composite and Kakao Corp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and Kakao is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Kakao Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kakao Corp 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 Kakao Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kakao Corp has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Kakao Corp go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Kakao Corp
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Kakao Corp. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.62 times less risky than Kakao Corp. The index trades about -0.19 of its potential returns per unit of risk. The Kakao Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,665,000 in Kakao Corp on August 28, 2024 and sell it today you would earn a total of 35,000 from holding Kakao Corp or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Kakao Corp
Performance |
| Timeline |
Kosdaq Composite and Kakao Corp Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Kakao Corp
Pair trading matchups for Kakao Corp
Pair Trading with Kosdaq Composite and Kakao Corp
The main advantage of trading using opposite Kosdaq Composite and Kakao Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Kakao Corp 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 Kakao Corp will offset losses from the drop in Kakao Corp's long position.| Kosdaq Composite vs. Shinil Electronics Co | Kosdaq Composite vs. Sungdo Engineering Construction | Kosdaq Composite vs. Seoul Electronics Telecom | Kosdaq Composite vs. ENERGYMACHINERY KOREA CoLtd |
| Kakao Corp vs. AfreecaTV Co | Kakao Corp vs. SS TECH | Kakao Corp vs. Busan Industrial Co | Kakao Corp vs. Busan Ind |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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