Correlation Between Mirai Semiconductors and Dongkuk Structures

Can any of the company-specific risk be diversified away by investing in both Mirai Semiconductors and Dongkuk Structures 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 Mirai Semiconductors and Dongkuk Structures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mirai Semiconductors Co and Dongkuk Structures Construction, you can compare the effects of market volatilities on Mirai Semiconductors and Dongkuk Structures 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 Mirai Semiconductors with a short position of Dongkuk Structures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirai Semiconductors and Dongkuk Structures.

Diversification Opportunities for Mirai Semiconductors and Dongkuk Structures

0.67

Correlation Coefficient

Mirai Semiconductors  Dongkuk Structures

Poor diversification

The 3 months correlation between Mirai and Dongkuk is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mirai Semiconductors Co and Dongkuk Structures Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongkuk Structures and Mirai Semiconductors 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 Mirai Semiconductors Co are associated (or correlated) with Dongkuk Structures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongkuk Structures has no effect on the direction of Mirai Semiconductors i.e., Mirai Semiconductors and Dongkuk Structures go up and down completely randomly.

Pair Corralation between Mirai Semiconductors and Dongkuk Structures

Assuming the 90 days trading horizon Mirai Semiconductors Co is expected to under-perform the Dongkuk Structures. In addition to that, Mirai Semiconductors is 1.2 times more volatile than Dongkuk Structures Construction. It trades about -0.13 of its total potential returns per unit of risk. Dongkuk Structures Construction is currently generating about -0.03 per unit of volatility. If you would invest  273,500  in Dongkuk Structures Construction on October 10, 2024 and sell it today you would lose (21,000) from holding Dongkuk Structures Construction or give up 7.68% of portfolio value over 90 days.

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

Mirai Semiconductors Co  vs.  Dongkuk Structures Constructio

Mirai Semiconductors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirai Semiconductors Co 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Dongkuk Structures

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dongkuk Structures Construction has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Dongkuk Structures is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mirai Semiconductors and Dongkuk Structures

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

The idea behind Mirai Semiconductors Co and Dongkuk Structures Construction 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.