Correlation Between Kosdaq Composite and Daejoo Electronic
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By analyzing existing cross correlation between Kosdaq Composite Index and Daejoo Electronic Materials, you can compare the effects of market volatilities on Kosdaq Composite and Daejoo Electronic 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 Daejoo Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Daejoo Electronic.
Diversification Opportunities for Kosdaq Composite and Daejoo Electronic
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kosdaq and Daejoo is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Daejoo Electronic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Electronic 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 Daejoo Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Electronic has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Daejoo Electronic go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Daejoo Electronic
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Daejoo Electronic. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 2.72 times less risky than Daejoo Electronic. The index trades about -0.07 of its potential returns per unit of risk. The Daejoo Electronic Materials is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,650,000 in Daejoo Electronic Materials on August 25, 2024 and sell it today you would earn a total of 70,000 from holding Daejoo Electronic Materials or generate 0.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Daejoo Electronic Materials
Performance |
| Timeline |
Kosdaq Composite and Daejoo Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Daejoo Electronic Materials
Pair trading matchups for Daejoo Electronic
Pair Trading with Kosdaq Composite and Daejoo Electronic
The main advantage of trading using opposite Kosdaq Composite and Daejoo Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Daejoo Electronic 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 Daejoo Electronic will offset losses from the drop in Daejoo Electronic'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 |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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