Correlation Between Kosdaq Composite and Seojin System
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By analyzing existing cross correlation between Kosdaq Composite Index and Seojin System CoLtd, you can compare the effects of market volatilities on Kosdaq Composite and Seojin System 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 Seojin System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Seojin System.
Diversification Opportunities for Kosdaq Composite and Seojin System
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kosdaq and Seojin is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Seojin System CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seojin System 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 Seojin System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seojin System CoLtd has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Seojin System go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Seojin System
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.36 times more return on investment than Seojin System. However, Kosdaq Composite Index is 2.75 times less risky than Seojin System. It trades about -0.37 of its potential returns per unit of risk. Seojin System CoLtd is currently generating about -0.15 per unit of risk. If you would invest 75,408 in Kosdaq Composite Index on September 3, 2024 and sell it today you would lose (7,589) from holding Kosdaq Composite Index or give up 10.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Seojin System CoLtd
Performance |
| Timeline |
Kosdaq Composite and Seojin System Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Seojin System CoLtd
Pair trading matchups for Seojin System
Pair Trading with Kosdaq Composite and Seojin System
The main advantage of trading using opposite Kosdaq Composite and Seojin System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Seojin System 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 Seojin System will offset losses from the drop in Seojin System's long position.The idea behind Kosdaq Composite Index and Seojin System 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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