Correlation Between Mirae Asset and Handok Clean

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

Diversification Opportunities for Mirae Asset and Handok Clean

-0.28

Correlation Coefficient

Mirae Asset  Handok Clean

Very good diversification

The 3 months correlation between Mirae and Handok is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of Mirae Asset i.e., Mirae Asset and Handok Clean go up and down completely randomly.

Pair Corralation between Mirae Asset and Handok Clean

Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate about the same return on investment as Handok Clean Tech. But, Mirae Asset Daewoo is 1.33 times less risky than Handok Clean. It trades about 0.12 of its potential returns per unit of risk. Handok Clean Tech is currently generating about 0.09 per unit of risk. If you would invest  624,000  in Handok Clean Tech on December 1, 2024 and sell it today you would earn a total of  13,000  from holding Handok Clean Tech or generate 2.08% 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.  Handok Clean Tech

Mirae Asset Daewoo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mirae Asset Daewoo has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Handok Clean Tech

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Handok Clean Tech are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Handok Clean may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mirae Asset and Handok Clean

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

The idea behind Mirae Asset Daewoo and Handok Clean Tech 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.