Correlation Between Kosdaq Composite and Aurora World
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By analyzing existing cross correlation between Kosdaq Composite Index and Aurora World, you can compare the effects of market volatilities on Kosdaq Composite and Aurora World 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 Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Aurora World.
Diversification Opportunities for Kosdaq Composite and Aurora World
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kosdaq and Aurora is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World 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 Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Aurora World go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Aurora World
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Aurora World. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.71 times less risky than Aurora World. The index trades about -0.38 of its potential returns per unit of risk. The Aurora World is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 569,000 in Aurora World on September 3, 2024 and sell it today you would earn a total of 37,000 from holding Aurora World or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Aurora World
Performance |
| Timeline |
Kosdaq Composite and Aurora World Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Aurora World
Pair trading matchups for Aurora World
Pair Trading with Kosdaq Composite and Aurora World
The main advantage of trading using opposite Kosdaq Composite and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Aurora World 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 Aurora World will offset losses from the drop in Aurora World's long position.The idea behind Kosdaq Composite Index and Aurora World pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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