Correlation Between Kosdaq Composite and Korea Information
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By analyzing existing cross correlation between Kosdaq Composite Index and Korea Information Engineering, you can compare the effects of market volatilities on Kosdaq Composite and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Korea Information.
Diversification Opportunities for Kosdaq Composite and Korea Information
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and Korea is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Korea Information go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Korea Information
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.93 times more return on investment than Korea Information. However, Kosdaq Composite Index is 1.08 times less risky than Korea Information. It trades about -0.24 of its potential returns per unit of risk. Korea Information Engineering is currently generating about -0.36 per unit of risk. If you would invest 73,459 in Kosdaq Composite Index on August 25, 2024 and sell it today you would lose (5,704) from holding Kosdaq Composite Index or give up 7.76% 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. Korea Information Engineering
Performance |
| Timeline |
Kosdaq Composite and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Korea Information Engineering
Pair trading matchups for Korea Information
Pair Trading with Kosdaq Composite and Korea Information
The main advantage of trading using opposite Kosdaq Composite and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information'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 |
| Korea Information vs. Hannong Chemicals | Korea Information vs. Daejung Chemicals Metals | Korea Information vs. Digital Power Communications | Korea Information vs. Nice Information Telecommunication |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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