Correlation Between Ilji Technology and Mirae Asset

Can any of the company-specific risk be diversified away by investing in both Ilji Technology and Mirae Asset 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 Ilji Technology and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ilji Technology Co and Mirae Asset Daewoo, you can compare the effects of market volatilities on Ilji Technology and Mirae Asset 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 Ilji Technology with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilji Technology and Mirae Asset.

Diversification Opportunities for Ilji Technology and Mirae Asset

0.51

Correlation Coefficient

Ilji Technology  Mirae Asset

Very weak diversification

The 3 months correlation between Ilji and Mirae is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ilji Technology Co and Mirae Asset Daewoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirae Asset Daewoo and Ilji Technology 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 Ilji Technology Co are associated (or correlated) with Mirae Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirae Asset Daewoo has no effect on the direction of Ilji Technology i.e., Ilji Technology and Mirae Asset go up and down completely randomly.

Pair Corralation between Ilji Technology and Mirae Asset

Assuming the 90 days trading horizon Ilji Technology Co is expected to generate 2.06 times more return on investment than Mirae Asset. However, Ilji Technology is 2.06 times more volatile than Mirae Asset Daewoo. It trades about 0.1 of its potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.08 per unit of risk. If you would invest  377,311  in Ilji Technology Co on November 28, 2024 and sell it today you would earn a total of  44,689  from holding Ilji Technology Co or generate 11.84% return on investment over 90 days.

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

Ilji Technology Co  vs.  Mirae Asset Daewoo

Ilji Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ilji Technology Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ilji Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Mirae Asset Daewoo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mirae Asset Daewoo are ranked lower than 6 (%) 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.

Pair Trading with Ilji Technology and Mirae Asset

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

The idea behind Ilji Technology Co and Mirae Asset Daewoo 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.