Correlation Between Mirae Asset and Korea Electronic
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Korea Electronic 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 Korea Electronic 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 Korea Electronic Certification, you can compare the effects of market volatilities on Mirae Asset and Korea Electronic 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 Korea Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Korea Electronic.
Diversification Opportunities for Mirae Asset and Korea Electronic
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mirae and Korea is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Korea Electronic Certification in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Electronic Cer 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 Korea Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Electronic Cer has no effect on the direction of Mirae Asset i.e., Mirae Asset and Korea Electronic go up and down completely randomly.
Pair Corralation between Mirae Asset and Korea Electronic
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 1.96 times more return on investment than Korea Electronic. However, Mirae Asset is 1.96 times more volatile than Korea Electronic Certification. It trades about 0.03 of its potential returns per unit of risk. Korea Electronic Certification is currently generating about -0.11 per unit of risk. If you would invest 420,000 in Mirae Asset Daewoo on September 26, 2024 and sell it today you would earn a total of 15,500 from holding Mirae Asset Daewoo or generate 3.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mirae Asset Daewoo vs. Korea Electronic Certification
Performance |
Timeline |
Mirae Asset Daewoo |
Korea Electronic Cer |
Mirae Asset and Korea Electronic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mirae Asset and Korea Electronic
The main advantage of trading using opposite Mirae Asset and Korea Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Korea Electronic 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 Korea Electronic will offset losses from the drop in Korea Electronic'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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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