Correlation Between Kosdaq Composite and SFA Engineering
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By analyzing existing cross correlation between Kosdaq Composite Index and SFA Engineering, you can compare the effects of market volatilities on Kosdaq Composite and SFA Engineering 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 SFA Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and SFA Engineering.
Diversification Opportunities for Kosdaq Composite and SFA Engineering
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and SFA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and SFA Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SFA Engineering 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 SFA Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SFA Engineering has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and SFA Engineering go up and down completely randomly.
Pair Corralation between Kosdaq Composite and SFA Engineering
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the SFA Engineering. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 2.44 times less risky than SFA Engineering. The index trades about -0.17 of its potential returns per unit of risk. The SFA Engineering is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,115,000 in SFA Engineering on August 28, 2024 and sell it today you would lose (15,000) from holding SFA Engineering or give up 0.71% 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. SFA Engineering
Performance |
| Timeline |
Kosdaq Composite and SFA Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
SFA Engineering
Pair trading matchups for SFA Engineering
Pair Trading with Kosdaq Composite and SFA Engineering
The main advantage of trading using opposite Kosdaq Composite and SFA Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, SFA Engineering 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 SFA Engineering will offset losses from the drop in SFA Engineering's long position.| Kosdaq Composite vs. Daejung Chemicals Metals | Kosdaq Composite vs. LG Household Healthcare | Kosdaq Composite vs. Cuckoo Homesys Co | Kosdaq Composite vs. Osang Healthcare Co,Ltd |
| SFA Engineering vs. Korea Real Estate | SFA Engineering vs. Korea Ratings Co | SFA Engineering vs. IQuest Co | SFA Engineering vs. Wonbang Tech 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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