Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

KRX Sector Indexes' Rebalancing Event, Often off Traders' Radar but with Significant Price Impacts

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>Hankook &amp; Company is unexpectedly entering Autos, the only large-cap inclusion, likely getting a significant weight and facing a massive flow impact.</li>
<li>Like BBIG, this single-day flow event driven by one or two ETFs means smaller front-running impact, but names like Hankook &amp; Company could see early positioning due to massive flows.</li>
<li>I'll position in big impact names two days before the ETF rebalance trading. I’ll then go long on a basket of those with over 0.5x ADTV at Wednesday’s close.</li>
</ul>


Hankook &amp; Company is unexpectedly entering Autos, the only large-cap inclusion, likely getting a significant weight and facing a massive flow impact.
Like BBIG, this single-day flow event driven by one or two ETFs means smaller front-running impact, but names like Hankook &amp; Company could see early positioning due to massive flows.
I'll position in big impact names two days before the ETF rebalance trading. I’ll then go long on a basket of those with over 0.5x ADTV at Wednesday’s close.


KRX Sector Rebalance Shocker: Massive Flow Impact on Hankook & Company