Correlation Between Kosdaq Composite and Sejong Telecom
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By analyzing existing cross correlation between Kosdaq Composite Index and Sejong Telecom, you can compare the effects of market volatilities on Kosdaq Composite and Sejong Telecom 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 Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Sejong Telecom.
Diversification Opportunities for Kosdaq Composite and Sejong Telecom
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kosdaq and Sejong is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom 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 Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Sejong Telecom go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Sejong Telecom
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 1.31 times more return on investment than Sejong Telecom. However, Kosdaq Composite is 1.31 times more volatile than Sejong Telecom. It trades about -0.19 of its potential returns per unit of risk. Sejong Telecom is currently generating about -0.44 per unit of risk. If you would invest 74,048 in Kosdaq Composite Index on August 29, 2024 and sell it today you would lose (4,835) from holding Kosdaq Composite Index or give up 6.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Sejong Telecom
Performance |
| Timeline |
Kosdaq Composite and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Sejong Telecom
Pair trading matchups for Sejong Telecom
Pair Trading with Kosdaq Composite and Sejong Telecom
The main advantage of trading using opposite Kosdaq Composite and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom'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 |
| Sejong Telecom vs. AfreecaTV Co | Sejong Telecom vs. SS TECH | Sejong Telecom vs. Busan Industrial Co | Sejong Telecom 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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