Correlation Between Kosdaq Composite and YOUNGHWA TECH
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By analyzing existing cross correlation between Kosdaq Composite Index and YOUNGHWA TECH Co, you can compare the effects of market volatilities on Kosdaq Composite and YOUNGHWA TECH 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 YOUNGHWA TECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and YOUNGHWA TECH.
Diversification Opportunities for Kosdaq Composite and YOUNGHWA TECH
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kosdaq and YOUNGHWA is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and YOUNGHWA TECH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YOUNGHWA TECH 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 YOUNGHWA TECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YOUNGHWA TECH has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and YOUNGHWA TECH go up and down completely randomly.
Pair Corralation between Kosdaq Composite and YOUNGHWA TECH
Assuming the 90 days trading horizon Kosdaq Composite Index is not expected to generate positive returns. However, Kosdaq Composite Index is 1.47 times less risky than YOUNGHWA TECH. It waists most of its returns potential to compensate for thr risk taken. YOUNGHWA TECH is generating about -0.02 per unit of risk. If you would invest 71,516 in Kosdaq Composite Index on September 3, 2024 and sell it today you would lose (3,697) from holding Kosdaq Composite Index or give up 5.17% 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. YOUNGHWA TECH Co
Performance |
| Timeline |
Kosdaq Composite and YOUNGHWA TECH Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
YOUNGHWA TECH Co
Pair trading matchups for YOUNGHWA TECH
Pair Trading with Kosdaq Composite and YOUNGHWA TECH
The main advantage of trading using opposite Kosdaq Composite and YOUNGHWA TECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, YOUNGHWA TECH 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 YOUNGHWA TECH will offset losses from the drop in YOUNGHWA TECH's long position.The idea behind Kosdaq Composite Index and YOUNGHWA TECH 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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