Correlation Between Kosdaq Composite and Hyundai Industrial
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By analyzing existing cross correlation between Kosdaq Composite Index and Hyundai Industrial Co, you can compare the effects of market volatilities on Kosdaq Composite and Hyundai Industrial 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 Hyundai Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Hyundai Industrial.
Diversification Opportunities for Kosdaq Composite and Hyundai Industrial
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and Hyundai is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Hyundai Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Industrial 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 Hyundai Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Industrial has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Hyundai Industrial go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Hyundai Industrial
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the Hyundai Industrial. In addition to that, Kosdaq Composite is 1.08 times more volatile than Hyundai Industrial Co. It trades about -0.25 of its total potential returns per unit of risk. Hyundai Industrial Co is currently generating about -0.16 per unit of volatility. If you would invest 533,000 in Hyundai Industrial Co on September 1, 2024 and sell it today you would lose (28,000) from holding Hyundai Industrial Co or give up 5.25% 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. Hyundai Industrial Co
Performance |
| Timeline |
Kosdaq Composite and Hyundai Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Hyundai Industrial Co
Pair trading matchups for Hyundai Industrial
Pair Trading with Kosdaq Composite and Hyundai Industrial
The main advantage of trading using opposite Kosdaq Composite and Hyundai Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Hyundai Industrial 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 Hyundai Industrial will offset losses from the drop in Hyundai Industrial's long position.| Kosdaq Composite vs. Golden Bridge Investment | Kosdaq Composite vs. Lotte Data Communication | Kosdaq Composite vs. E Investment Development | Kosdaq Composite vs. Stic Investments |
| Hyundai Industrial vs. LG Display | Hyundai Industrial vs. Hyundai Motor | Hyundai Industrial vs. Hyundai Motor Co | Hyundai Industrial vs. Hyundai Motor 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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