Correlation Between Kosdaq Composite and Wemade CoLtd
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By analyzing existing cross correlation between Kosdaq Composite Index and Wemade CoLtd, you can compare the effects of market volatilities on Kosdaq Composite and Wemade CoLtd 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 Wemade CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Wemade CoLtd.
Diversification Opportunities for Kosdaq Composite and Wemade CoLtd
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kosdaq and Wemade is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Wemade CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wemade CoLtd 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 Wemade CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wemade CoLtd has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Wemade CoLtd go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Wemade CoLtd
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Wemade CoLtd. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.98 times less risky than Wemade CoLtd. The index trades about -0.1 of its potential returns per unit of risk. The Wemade CoLtd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,325,000 in Wemade CoLtd on September 3, 2024 and sell it today you would earn a total of 225,000 from holding Wemade CoLtd or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Wemade CoLtd
Performance |
| Timeline |
Kosdaq Composite and Wemade CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Wemade CoLtd
Pair trading matchups for Wemade CoLtd
Pair Trading with Kosdaq Composite and Wemade CoLtd
The main advantage of trading using opposite Kosdaq Composite and Wemade CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Wemade CoLtd 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 Wemade CoLtd will offset losses from the drop in Wemade CoLtd's long position.The idea behind Kosdaq Composite Index and Wemade CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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