Correlation Between KODEX 200LONGKOSDAQ150 and 456680

Can any of the company-specific risk be diversified away by investing in both KODEX 200LONGKOSDAQ150 and 456680 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 KODEX 200LONGKOSDAQ150 and 456680 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KODEX 200LONGKOSDAQ150SHORT Futures and 456680, you can compare the effects of market volatilities on KODEX 200LONGKOSDAQ150 and 456680 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 KODEX 200LONGKOSDAQ150 with a short position of 456680. Check out your portfolio center. Please also check ongoing floating volatility patterns of KODEX 200LONGKOSDAQ150 and 456680.

Diversification Opportunities for KODEX 200LONGKOSDAQ150 and 456680

-0.01

Correlation Coefficient

KODEX 200LONGKOSDAQ150  456680

Good diversification

The 3 months correlation between KODEX and 456680 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding KODEX 200LONGKOSDAQ150SHORT Fu and 456680 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 456680 and KODEX 200LONGKOSDAQ150 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 KODEX 200LONGKOSDAQ150SHORT Futures are associated (or correlated) with 456680. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 456680 has no effect on the direction of KODEX 200LONGKOSDAQ150 i.e., KODEX 200LONGKOSDAQ150 and 456680 go up and down completely randomly.

Pair Corralation between KODEX 200LONGKOSDAQ150 and 456680

Assuming the 90 days trading horizon KODEX 200LONGKOSDAQ150SHORT Futures is expected to generate 0.29 times more return on investment than 456680. However, KODEX 200LONGKOSDAQ150SHORT Futures is 3.46 times less risky than 456680. It trades about -0.07 of its potential returns per unit of risk. 456680 is currently generating about -0.23 per unit of risk. If you would invest  921,500  in KODEX 200LONGKOSDAQ150SHORT Futures on October 13, 2024 and sell it today you would lose (11,000) from holding KODEX 200LONGKOSDAQ150SHORT Futures or give up 1.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

KODEX 200LONGKOSDAQ150SHORT Fu  vs.  456680

KODEX 200LONGKOSDAQ150

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KODEX 200LONGKOSDAQ150SHORT Futures are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KODEX 200LONGKOSDAQ150 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

456680

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 456680 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 456680 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KODEX 200LONGKOSDAQ150 and 456680

The main advantage of trading using opposite KODEX 200LONGKOSDAQ150 and 456680 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KODEX 200LONGKOSDAQ150 position performs unexpectedly, 456680 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 456680 will offset losses from the drop in 456680's long position.

The idea behind KODEX 200LONGKOSDAQ150SHORT Futures and 456680 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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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.