Correlation Between Kosdaq Composite and Next Entertainment
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By analyzing existing cross correlation between Kosdaq Composite Index and Next Entertainment World, you can compare the effects of market volatilities on Kosdaq Composite and Next Entertainment 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 Next Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Next Entertainment.
Diversification Opportunities for Kosdaq Composite and Next Entertainment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kosdaq and Next is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Next Entertainment World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Entertainment World 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 Next Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Entertainment World has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Next Entertainment go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Next Entertainment
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Next Entertainment. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 2.07 times less risky than Next Entertainment. The index trades about -0.19 of its potential returns per unit of risk. The Next Entertainment World is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 231,000 in Next Entertainment World on August 29, 2024 and sell it today you would lose (2,000) from holding Next Entertainment World or give up 0.87% 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. Next Entertainment World
Performance |
| Timeline |
Kosdaq Composite and Next Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Next Entertainment World
Pair trading matchups for Next Entertainment
Pair Trading with Kosdaq Composite and Next Entertainment
The main advantage of trading using opposite Kosdaq Composite and Next Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Next Entertainment 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 Next Entertainment will offset losses from the drop in Next Entertainment'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 |
| Next Entertainment vs. AfreecaTV Co | Next Entertainment vs. SS TECH | Next Entertainment vs. Busan Industrial Co | Next Entertainment vs. Busan Ind |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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