Correlation Between Mirae Asset and Heungkuk Metaltech
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Heungkuk Metaltech 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 Mirae Asset and Heungkuk Metaltech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirae Asset Daewoo and Heungkuk Metaltech CoLtd, you can compare the effects of market volatilities on Mirae Asset and Heungkuk Metaltech 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 Mirae Asset with a short position of Heungkuk Metaltech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Heungkuk Metaltech.
Diversification Opportunities for Mirae Asset and Heungkuk Metaltech
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mirae and Heungkuk is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Heungkuk Metaltech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heungkuk Metaltech CoLtd and Mirae Asset 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 Mirae Asset Daewoo are associated (or correlated) with Heungkuk Metaltech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heungkuk Metaltech CoLtd has no effect on the direction of Mirae Asset i.e., Mirae Asset and Heungkuk Metaltech go up and down completely randomly.
Pair Corralation between Mirae Asset and Heungkuk Metaltech
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 1.07 times more return on investment than Heungkuk Metaltech. However, Mirae Asset is 1.07 times more volatile than Heungkuk Metaltech CoLtd. It trades about 0.02 of its potential returns per unit of risk. Heungkuk Metaltech CoLtd is currently generating about 0.01 per unit of risk. If you would invest 386,706 in Mirae Asset Daewoo on September 23, 2024 and sell it today you would earn a total of 44,794 from holding Mirae Asset Daewoo or generate 11.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Mirae Asset Daewoo vs. Heungkuk Metaltech CoLtd
Performance |
Timeline |
Mirae Asset Daewoo |
Heungkuk Metaltech CoLtd |
Mirae Asset and Heungkuk Metaltech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mirae Asset and Heungkuk Metaltech
The main advantage of trading using opposite Mirae Asset and Heungkuk Metaltech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Heungkuk Metaltech 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 Heungkuk Metaltech will offset losses from the drop in Heungkuk Metaltech's long position.Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. LG Energy Solution | Mirae Asset vs. SK Hynix |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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