Correlation Between EV Advanced and Mirae Asset

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

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

Diversification Opportunities for EV Advanced and Mirae Asset

0.52

Correlation Coefficient

EV Advanced  Mirae Asset

Very weak diversification

The 3 months correlation between 131400 and Mirae is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding EV Advanced Material 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 EV Advanced 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 EV Advanced Material 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 EV Advanced i.e., EV Advanced and Mirae Asset go up and down completely randomly.

Pair Corralation between EV Advanced and Mirae Asset

Assuming the 90 days trading horizon EV Advanced is expected to generate 1.82 times less return on investment than Mirae Asset. In addition to that, EV Advanced is 2.14 times more volatile than Mirae Asset Daewoo. It trades about 0.01 of its total potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.06 per unit of volatility. If you would invest  448,000  in Mirae Asset Daewoo on November 29, 2024 and sell it today you would earn a total of  17,000  from holding Mirae Asset Daewoo or generate 3.79% return on investment over 90 days.

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

EV Advanced Material  vs.  Mirae Asset Daewoo

EV Advanced Material

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EV Advanced Material are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, EV Advanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mirae Asset Daewoo

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mirae Asset Daewoo are ranked lower than 4 (%) 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 EV Advanced and Mirae Asset

The main advantage of trading using opposite EV Advanced and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EV Advanced 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 EV Advanced Material 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.