Correlation Between Kosdaq Composite and Hyosung Chemical
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By analyzing existing cross correlation between Kosdaq Composite Index and Hyosung Chemical Corp, you can compare the effects of market volatilities on Kosdaq Composite and Hyosung Chemical 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 Hyosung Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and Hyosung Chemical.
Diversification Opportunities for Kosdaq Composite and Hyosung Chemical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kosdaq and Hyosung is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and Hyosung Chemical Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Chemical Corp 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 Hyosung Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Chemical Corp has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and Hyosung Chemical go up and down completely randomly.
Pair Corralation between Kosdaq Composite and Hyosung Chemical
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to generate 0.64 times more return on investment than Hyosung Chemical. However, Kosdaq Composite Index is 1.57 times less risky than Hyosung Chemical. It trades about -0.16 of its potential returns per unit of risk. Hyosung Chemical Corp is currently generating about -0.5 per unit of risk. If you would invest 74,048 in Kosdaq Composite Index on August 28, 2024 and sell it today you would lose (4,217) from holding Kosdaq Composite Index or give up 5.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. Hyosung Chemical Corp
Performance |
| Timeline |
Kosdaq Composite and Hyosung Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
Hyosung Chemical Corp
Pair trading matchups for Hyosung Chemical
Pair Trading with Kosdaq Composite and Hyosung Chemical
The main advantage of trading using opposite Kosdaq Composite and Hyosung Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, Hyosung Chemical 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 Hyosung Chemical will offset losses from the drop in Hyosung Chemical's long position.| Kosdaq Composite vs. Shinil Electronics Co | Kosdaq Composite vs. Sungdo Engineering Construction | Kosdaq Composite vs. Seoul Electronics Telecom | Kosdaq Composite vs. ENERGYMACHINERY KOREA CoLtd |
| Hyosung Chemical vs. Nh Investment And | Hyosung Chemical vs. Seoyon Topmetal Co | Hyosung Chemical vs. Sangsangin Investment Securities | Hyosung Chemical vs. MetaLabs 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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