Correlation Between 456680 and MiraeAsset TIGER

Can any of the company-specific risk be diversified away by investing in both 456680 and MiraeAsset TIGER 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 456680 and MiraeAsset TIGER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 456680 and MiraeAsset TIGER Quality, you can compare the effects of market volatilities on 456680 and MiraeAsset TIGER 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 456680 with a short position of MiraeAsset TIGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of 456680 and MiraeAsset TIGER.

Diversification Opportunities for 456680 and MiraeAsset TIGER

-0.64

Correlation Coefficient

456680  MiraeAsset TIGER

Excellent diversification

The 3 months correlation between 456680 and MiraeAsset is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding 456680 and MiraeAsset TIGER Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MiraeAsset TIGER Quality and 456680 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 456680 are associated (or correlated) with MiraeAsset TIGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MiraeAsset TIGER Quality has no effect on the direction of 456680 i.e., 456680 and MiraeAsset TIGER go up and down completely randomly.

Pair Corralation between 456680 and MiraeAsset TIGER

Assuming the 90 days trading horizon 456680 is expected to generate 1.54 times more return on investment than MiraeAsset TIGER. However, 456680 is 1.54 times more volatile than MiraeAsset TIGER Quality. It trades about 0.07 of its potential returns per unit of risk. MiraeAsset TIGER Quality is currently generating about -0.08 per unit of risk. If you would invest  593,000  in 456680 on September 24, 2024 and sell it today you would earn a total of  15,500  from holding 456680 or generate 2.61% return on investment over 90 days.

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

456680  vs.  MiraeAsset TIGER Quality

456680

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 456680 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 456680 sustained solid returns over the last few months and may actually be approaching a breakup point.

MiraeAsset TIGER Quality

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with 456680 and MiraeAsset TIGER

The main advantage of trading using opposite 456680 and MiraeAsset TIGER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 456680 position performs unexpectedly, MiraeAsset TIGER 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 MiraeAsset TIGER will offset losses from the drop in MiraeAsset TIGER's long position.

The idea behind 456680 and MiraeAsset TIGER Quality 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.