Correlation Between Kosdaq Composite and Aloys
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By analyzing existing cross correlation between Kosdaq Composite Index and Aloys Inc, you can compare the effects of market volatilities on Kosdaq Composite and Aloys 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 Aloys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Aloys.
Diversification Opportunities for Kosdaq Composite and Aloys
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kosdaq and Aloys is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Aloys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aloys Inc 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 Aloys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aloys Inc has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Aloys go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Aloys
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.29 times more return on investment than Aloys. However, Kosdaq Composite Index is 3.47 times less risky than Aloys. It trades about -0.21 of its potential returns per unit of risk. Aloys Inc is currently generating about -0.13 per unit of risk. If you would invest 76,898 in Kosdaq Composite Index on September 3, 2024 and sell it today you would lose (9,079) from holding Kosdaq Composite Index or give up 11.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Aloys Inc
Performance |
| Timeline |
Kosdaq Composite and Aloys Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Aloys Inc
Pair trading matchups for Aloys
Pair Trading with Kosdaq Composite and Aloys
The main advantage of trading using opposite Kosdaq Composite and Aloys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Aloys 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 Aloys will offset losses from the drop in Aloys' long position.The idea behind Kosdaq Composite Index and Aloys Inc 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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