Correlation Between Mirae Asset and CKH Food

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

Diversification Opportunities for Mirae Asset and CKH Food

0.76

Correlation Coefficient

Mirae Asset  CKH Food

Poor diversification

The 3 months correlation between Mirae and CKH is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset No2 and CKH Food Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKH Food Health 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 CKH Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKH Food Health has no effect on the direction of Mirae Asset i.e., Mirae Asset and CKH Food go up and down completely randomly.

Pair Corralation between Mirae Asset and CKH Food

Assuming the 90 days trading horizon Mirae Asset No2 is expected to generate 0.75 times more return on investment than CKH Food. However, Mirae Asset No2 is 1.34 times less risky than CKH Food. It trades about -0.11 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.11 per unit of risk. If you would invest  1,535,000  in Mirae Asset No2 on September 2, 2024 and sell it today you would lose (240,000) from holding Mirae Asset No2 or give up 15.64% of portfolio value over 90 days.

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

Mirae Asset No2  vs.  CKH Food Health

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

CKH Food Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CKH Food Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Mirae Asset and CKH Food

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

The idea behind Mirae Asset No2 and CKH Food Health 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.