Correlation Between Kosdaq Composite and Keum Kang
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By analyzing existing cross correlation between Kosdaq Composite Index and Keum Kang Steel, you can compare the effects of market volatilities on Kosdaq Composite and Keum Kang 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 Keum Kang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Keum Kang.
Diversification Opportunities for Kosdaq Composite and Keum Kang
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kosdaq and Keum is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Keum Kang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keum Kang 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 Keum Kang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keum Kang Steel has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Keum Kang go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Keum Kang
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.47 times more return on investment than Keum Kang. However, Kosdaq Composite Index is 2.13 times less risky than Keum Kang. It trades about -0.19 of its potential returns per unit of risk. Keum Kang Steel is currently generating about -0.12 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. Keum Kang Steel
Performance |
| Timeline |
Kosdaq Composite and Keum Kang Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Keum Kang Steel
Pair trading matchups for Keum Kang
Pair Trading with Kosdaq Composite and Keum Kang
The main advantage of trading using opposite Kosdaq Composite and Keum Kang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Keum Kang 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 Keum Kang will offset losses from the drop in Keum Kang'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 |
| Keum Kang vs. LG Chemicals | Keum Kang vs. Lotte Chemical Corp | Keum Kang vs. Hyundai Steel | Keum Kang vs. Seah Steel Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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