Correlation Between Mirae Asset and MiraeAsset TIGER

Can any of the company-specific risk be diversified away by investing in both Mirae Asset and MiraeAsset TIGER 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 MiraeAsset TIGER 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 MiraeAsset TIGER 200, you can compare the effects of market volatilities on Mirae Asset and MiraeAsset TIGER 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 MiraeAsset TIGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and MiraeAsset TIGER.

Diversification Opportunities for Mirae Asset and MiraeAsset TIGER

0.49

Correlation Coefficient

Mirae Asset  MiraeAsset TIGER

Very weak diversification

The 3 months correlation between Mirae and MiraeAsset is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and MiraeAsset TIGER 200 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MiraeAsset TIGER 200 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 MiraeAsset TIGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MiraeAsset TIGER 200 has no effect on the direction of Mirae Asset i.e., Mirae Asset and MiraeAsset TIGER go up and down completely randomly.

Pair Corralation between Mirae Asset and MiraeAsset TIGER

Assuming the 90 days trading horizon Mirae Asset is expected to generate 1.2 times less return on investment than MiraeAsset TIGER. But when comparing it to its historical volatility, Mirae Asset Daewoo is 1.15 times less risky than MiraeAsset TIGER. It trades about 0.16 of its potential returns per unit of risk. MiraeAsset TIGER 200 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,552,000  in MiraeAsset TIGER 200 on December 26, 2024 and sell it today you would earn a total of  146,500  from holding MiraeAsset TIGER 200 or generate 9.44% return on investment over 90 days.

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

Mirae Asset Daewoo  vs.  MiraeAsset TIGER 200

Mirae Asset Daewoo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mirae Asset Daewoo are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mirae Asset may actually be approaching a critical reversion point that can send shares even higher in April 2025.

MiraeAsset TIGER 200

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MiraeAsset TIGER 200 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MiraeAsset TIGER may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mirae Asset and MiraeAsset TIGER

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

The idea behind Mirae Asset Daewoo and MiraeAsset TIGER 200 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.