Correlation Between Kosdaq Composite and Dongyang
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By analyzing existing cross correlation between Kosdaq Composite Index and Dongyang EP, you can compare the effects of market volatilities on Kosdaq Composite and Dongyang 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 Dongyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Dongyang.
Diversification Opportunities for Kosdaq Composite and Dongyang
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and Dongyang is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Dongyang EP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongyang EP 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 Dongyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongyang EP has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Dongyang go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Dongyang
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Dongyang. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.05 times less risky than Dongyang. The index trades about -0.22 of its potential returns per unit of risk. The Dongyang EP is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,866,000 in Dongyang EP on August 31, 2024 and sell it today you would earn a total of 56,000 from holding Dongyang EP or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Dongyang EP
Performance |
| Timeline |
Kosdaq Composite and Dongyang Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Dongyang EP
Pair trading matchups for Dongyang
Pair Trading with Kosdaq Composite and Dongyang
The main advantage of trading using opposite Kosdaq Composite and Dongyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Dongyang 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 Dongyang will offset losses from the drop in Dongyang's long position.| Kosdaq Composite vs. LG Chemicals | Kosdaq Composite vs. Sempio Foods Co | Kosdaq Composite vs. SK Chemicals Co | Kosdaq Composite vs. Korea Shipbuilding Offshore |
| Dongyang vs. Koh Young Technology | Dongyang vs. SK Telecom Co | Dongyang vs. Sejong Telecom | Dongyang vs. Lotte Data Communication |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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