Correlation Between KIM KINDEX and Dow Jones
Can any of the company-specific risk be diversified away by investing in both KIM KINDEX and Dow Jones at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KIM KINDEX and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIM KINDEX KOSPI and Dow Jones Industrial, you can compare the effects of market volatilities on KIM KINDEX and Dow Jones 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 KIM KINDEX with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIM KINDEX and Dow Jones.
Diversification Opportunities for KIM KINDEX and Dow Jones
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KIM and Dow is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding KIM KINDEX KOSPI and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and KIM KINDEX 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 KIM KINDEX KOSPI are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of KIM KINDEX i.e., KIM KINDEX and Dow Jones go up and down completely randomly.
Pair Corralation between KIM KINDEX and Dow Jones
Assuming the 90 days trading horizon KIM KINDEX KOSPI is expected to generate 1.96 times more return on investment than Dow Jones. However, KIM KINDEX is 1.96 times more volatile than Dow Jones Industrial. It trades about -0.1 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.3 per unit of risk. If you would invest 2,614,500 in KIM KINDEX KOSPI on September 24, 2024 and sell it today you would lose (84,500) from holding KIM KINDEX KOSPI or give up 3.23% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 90.91% |
Values | Daily Returns |
KIM KINDEX KOSPI vs. Dow Jones Industrial
Performance |
Timeline |
KIM KINDEX and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
KIM KINDEX KOSPI
Pair trading matchups for KIM KINDEX
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with KIM KINDEX and Dow Jones
The main advantage of trading using opposite KIM KINDEX and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIM KINDEX position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.KIM KINDEX vs. 456680 | KIM KINDEX vs. Busan Industrial Co | KIM KINDEX vs. Busan Ind | KIM KINDEX vs. Mirae Asset Daewoo |
Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Sonida Senior Living | Dow Jones vs. Avadel Pharmaceuticals PLC | Dow Jones vs. Cardinal Health |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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