Correlation Between Kosdaq Composite and Daedong Steel
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By analyzing existing cross correlation between Kosdaq Composite Index and Daedong Steel Co, you can compare the effects of market volatilities on Kosdaq Composite and Daedong Steel 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 Daedong Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Daedong Steel.
Diversification Opportunities for Kosdaq Composite and Daedong Steel
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kosdaq and Daedong is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Daedong Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daedong Steel 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 Daedong Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daedong Steel has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Daedong Steel go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Daedong Steel
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Daedong Steel. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.42 times less risky than Daedong Steel. The index trades about -0.24 of its potential returns per unit of risk. The Daedong Steel Co is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 362,000 in Daedong Steel Co on August 25, 2024 and sell it today you would lose (27,500) from holding Daedong Steel Co or give up 7.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Daedong Steel Co
Performance |
| Timeline |
Kosdaq Composite and Daedong Steel Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Daedong Steel Co
Pair trading matchups for Daedong Steel
Pair Trading with Kosdaq Composite and Daedong Steel
The main advantage of trading using opposite Kosdaq Composite and Daedong Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Daedong Steel 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 Daedong Steel will offset losses from the drop in Daedong Steel's long position.| Kosdaq Composite vs. Kbi Metal Co | Kosdaq Composite vs. Shinsung Delta Tech | Kosdaq Composite vs. Woori Technology | Kosdaq Composite vs. Dongil Metal Co |
| Daedong Steel vs. Global Standard Technology | Daedong Steel vs. Songwon Industrial Co | Daedong Steel vs. PJ Metal Co | Daedong Steel vs. Samhwa Paint Industrial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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