Correlation Between Taekwang Ind and Mirae Asset

Can any of the company-specific risk be diversified away by investing in both Taekwang Ind and Mirae Asset 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 Taekwang Ind and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Taekwang Ind and Mirae Asset No2, you can compare the effects of market volatilities on Taekwang Ind and Mirae Asset 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 Taekwang Ind with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taekwang Ind and Mirae Asset.

Diversification Opportunities for Taekwang Ind and Mirae Asset

-0.43

Correlation Coefficient

Taekwang Ind  Mirae Asset

Very good diversification

The 3 months correlation between Taekwang and Mirae is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Taekwang Ind and Mirae Asset No2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirae Asset No2 and Taekwang Ind 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 Taekwang Ind are associated (or correlated) with Mirae Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirae Asset No2 has no effect on the direction of Taekwang Ind i.e., Taekwang Ind and Mirae Asset go up and down completely randomly.

Pair Corralation between Taekwang Ind and Mirae Asset

Assuming the 90 days trading horizon Taekwang Ind is expected to generate 0.8 times more return on investment than Mirae Asset. However, Taekwang Ind is 1.26 times less risky than Mirae Asset. It trades about 0.06 of its potential returns per unit of risk. Mirae Asset No2 is currently generating about -0.11 per unit of risk. If you would invest  59,100,000  in Taekwang Ind on September 2, 2024 and sell it today you would earn a total of  3,300,000  from holding Taekwang Ind or generate 5.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Taekwang Ind  vs.  Mirae Asset No2

Taekwang Ind

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Taekwang Ind are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Taekwang Ind may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mirae Asset No2

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirae Asset No2 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Taekwang Ind and Mirae Asset

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

The idea behind Taekwang Ind and Mirae Asset No2 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.