Correlation Between Mirae Asset and Woori Technology

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

By analyzing existing cross correlation between Mirae Asset No2 and Woori Technology Investment, you can compare the effects of market volatilities on Mirae Asset and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Woori Technology.

Diversification Opportunities for Mirae Asset and Woori Technology

0.22

Correlation Coefficient

Mirae Asset  Woori Technology

Modest diversification

The 3 months correlation between Mirae and Woori is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset No2 and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv 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 No2 are associated (or correlated) with Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Mirae Asset i.e., Mirae Asset and Woori Technology go up and down completely randomly.

Pair Corralation between Mirae Asset and Woori Technology

Assuming the 90 days trading horizon Mirae Asset No2 is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Mirae Asset No2 is 1.92 times less risky than Woori Technology. The stock trades about -0.07 of its potential returns per unit of risk. The Woori Technology Investment is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  849,000  in Woori Technology Investment on October 21, 2024 and sell it today you would lose (50,000) from holding Woori Technology Investment or give up 5.89% of portfolio value over 90 days.

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

Mirae Asset No2  vs.  Woori Technology Investment

Mirae Asset No2

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirae Asset No2 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Woori Technology Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Woori Technology Investment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Woori Technology 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 Woori Technology

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

The idea behind Mirae Asset No2 and Woori Technology Investment 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.