Correlation Between Kosdaq Composite and XIIlab
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By analyzing existing cross correlation between Kosdaq Composite Index and XIIlab Co, you can compare the effects of market volatilities on Kosdaq Composite and XIIlab 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 XIIlab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and XIIlab.
Diversification Opportunities for Kosdaq Composite and XIIlab
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and XIIlab is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and XIIlab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XIIlab 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 XIIlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XIIlab has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and XIIlab go up and down completely randomly.
Pair Corralation between Kosdaq Composite and XIIlab
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.4 times more return on investment than XIIlab. However, Kosdaq Composite Index is 2.5 times less risky than XIIlab. It trades about -0.1 of its potential returns per unit of risk. XIIlab Co is currently generating about -0.08 per unit of risk. If you would invest 85,075 in Kosdaq Composite Index on September 3, 2024 and sell it today you would lose (17,422) from holding Kosdaq Composite Index or give up 20.48% 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. XIIlab Co
Performance |
| Timeline |
Kosdaq Composite and XIIlab Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
XIIlab Co
Pair trading matchups for XIIlab
Pair Trading with Kosdaq Composite and XIIlab
The main advantage of trading using opposite Kosdaq Composite and XIIlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, XIIlab 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 XIIlab will offset losses from the drop in XIIlab's long position.The idea behind Kosdaq Composite Index and XIIlab Co 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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