Correlation Between Korea Information and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both Korea Information 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 Korea Information and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Mirae Asset Daewoo, you can compare the effects of market volatilities on Korea Information 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 Korea Information with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Mirae Asset.
Diversification Opportunities for Korea Information and Mirae Asset
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Mirae is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio 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 Korea Information 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 Korea Information Communications 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 Korea Information i.e., Korea Information and Mirae Asset go up and down completely randomly.
Pair Corralation between Korea Information and Mirae Asset
Assuming the 90 days trading horizon Korea Information Communications is expected to under-perform the Mirae Asset. But the stock apears to be less risky and, when comparing its historical volatility, Korea Information Communications is 1.32 times less risky than Mirae Asset. The stock trades about -0.02 of its potential returns per unit of risk. The Mirae Asset Daewoo is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 352,119 in Mirae Asset Daewoo on October 4, 2024 and sell it today you would earn a total of 71,881 from holding Mirae Asset Daewoo or generate 20.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.69% |
Values | Daily Returns |
Korea Information Communicatio vs. Mirae Asset Daewoo
Performance |
Timeline |
Korea Information |
Mirae Asset Daewoo |
Korea Information and Mirae Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Korea Information and Mirae Asset
The main advantage of trading using opposite Korea Information and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information 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.Korea Information vs. AptaBio Therapeutics | Korea Information vs. Daewoo SBI SPAC | Korea Information vs. Dream Security co | Korea Information vs. Microfriend |
Mirae Asset vs. Korean Reinsurance Co | Mirae Asset vs. Fine Besteel Co | Mirae Asset vs. J Steel Co | Mirae Asset vs. Playgram Co |
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.
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