Correlation Between Kosdaq Composite and KakaoBank Corp
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By analyzing existing cross correlation between Kosdaq Composite Index and KakaoBank Corp, you can compare the effects of market volatilities on Kosdaq Composite and KakaoBank Corp 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 KakaoBank Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosdaq Composite and KakaoBank Corp.
Diversification Opportunities for Kosdaq Composite and KakaoBank Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kosdaq and KakaoBank is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kosdaq Composite Index and KakaoBank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KakaoBank 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 KakaoBank Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KakaoBank Corp has no effect on the direction of Kosdaq Composite i.e., Kosdaq Composite and KakaoBank Corp go up and down completely randomly.
Pair Corralation between Kosdaq Composite and KakaoBank Corp
Assuming the 90 days trading horizon Kosdaq Composite Index is expected to under-perform the KakaoBank Corp. But the index apears to be less risky and, when comparing its historical volatility, Kosdaq Composite Index is 1.2 times less risky than KakaoBank Corp. The index trades about -0.25 of its potential returns per unit of risk. The KakaoBank Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,165,000 in KakaoBank Corp on September 1, 2024 and sell it today you would earn a total of 70,000 from holding KakaoBank Corp or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kosdaq Composite Index vs. KakaoBank Corp
Performance |
| Timeline |
Kosdaq Composite and KakaoBank Corp Volatility Contrast
Predicted Return Density |
| Returns |
Kosdaq Composite Index
Pair trading matchups for Kosdaq Composite
KakaoBank Corp
Pair trading matchups for KakaoBank Corp
Pair Trading with Kosdaq Composite and KakaoBank Corp
The main advantage of trading using opposite Kosdaq Composite and KakaoBank Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosdaq Composite position performs unexpectedly, KakaoBank Corp 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 KakaoBank Corp will offset losses from the drop in KakaoBank Corp's long position.| Kosdaq Composite vs. Golden Bridge Investment | Kosdaq Composite vs. Lotte Data Communication | Kosdaq Composite vs. E Investment Development | Kosdaq Composite vs. Stic Investments |
| KakaoBank Corp vs. Shinhan Financial Group | KakaoBank Corp vs. Hana Financial | KakaoBank Corp vs. Woori Financial Group | KakaoBank Corp vs. Industrial Bank |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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