Correlation Between Kosdaq Composite and STI
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By analyzing existing cross correlation between Kosdaq Composite Index and STI Co, you can compare the effects of market volatilities on Kosdaq Composite and STI 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 STI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and STI.
Diversification Opportunities for Kosdaq Composite and STI
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kosdaq and STI is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and STI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Co 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 STI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Co has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and STI go up and down completely randomly.
Pair Corralation between Kosdaq Composite and STI
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.31 times more return on investment than STI. However, Kosdaq Composite Index is 3.22 times less risky than STI. It trades about 0.2 of its potential returns per unit of risk. STI Co is currently generating about 0.02 per unit of risk. If you would invest 72,469 in Kosdaq Composite Index on November 18, 2024 and sell it today you would earn a total of 3,163 from holding Kosdaq Composite Index or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. STI Co
Performance |
| Timeline |
Kosdaq Composite and STI Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
STI Co
Pair trading matchups for STI
Pair Trading with Kosdaq Composite and STI
The main advantage of trading using opposite Kosdaq Composite and STI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, STI 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 STI will offset losses from the drop in STI's long position.| Kosdaq Composite vs. Korea Steel Co | Kosdaq Composite vs. Iljin Display | Kosdaq Composite vs. Fine Besteel Co | Kosdaq Composite vs. Histeel |
| STI vs. KB Financial Group | STI vs. Shinhan Financial Group | STI vs. Hyundai Motor | STI vs. Hyundai Motor 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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