Correlation Between Mirae Asset and Settlebank

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

Diversification Opportunities for Mirae Asset and Settlebank

0.52

Correlation Coefficient

Mirae Asset  Settlebank

Very weak diversification

The 3 months correlation between Mirae and Settlebank is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Mirae Asset i.e., Mirae Asset and Settlebank go up and down completely randomly.

Pair Corralation between Mirae Asset and Settlebank

Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 0.57 times more return on investment than Settlebank. However, Mirae Asset Daewoo is 1.74 times less risky than Settlebank. It trades about 0.02 of its potential returns per unit of risk. Settlebank is currently generating about 0.0 per unit of risk. If you would invest  403,520  in Mirae Asset Daewoo on November 29, 2024 and sell it today you would earn a total of  55,980  from holding Mirae Asset Daewoo or generate 13.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Mirae Asset Daewoo  vs.  Settlebank

Mirae Asset Daewoo

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mirae Asset Daewoo are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Mirae Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Settlebank

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Settlebank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Settlebank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mirae Asset and Settlebank

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

The idea behind Mirae Asset Daewoo and Settlebank 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.