Correlation Between Mirae Asset and Raphas

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

Diversification Opportunities for Mirae Asset and Raphas

-0.5

Correlation Coefficient

Mirae Asset  Raphas

Very good diversification

The 3 months correlation between Mirae and Raphas is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Raphas Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raphas 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 Raphas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raphas has no effect on the direction of Mirae Asset i.e., Mirae Asset and Raphas go up and down completely randomly.

Pair Corralation between Mirae Asset and Raphas

Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to under-perform the Raphas. But the stock apears to be less risky and, when comparing its historical volatility, Mirae Asset Daewoo is 1.7 times less risky than Raphas. The stock trades about -0.02 of its potential returns per unit of risk. The Raphas Co is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,435,000  in Raphas Co on October 10, 2024 and sell it today you would earn a total of  244,000  from holding Raphas Co or generate 17.0% return on investment over 90 days.

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

Mirae Asset Daewoo  vs.  Raphas Co

Mirae Asset Daewoo

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mirae Asset Daewoo are ranked lower than 2 (%) 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 February 2025.

Raphas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raphas Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Mirae Asset and Raphas

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

The idea behind Mirae Asset Daewoo and Raphas Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.