Correlation Between Alphabet and Mirae Asset

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

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

Diversification Opportunities for Alphabet and Mirae Asset

0.0

Correlation Coefficient

Alphabet  Mirae Asset

Pay attention - limited upside

The 3 months correlation between Alphabet and Mirae is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class A 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 Alphabet 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 Alphabet Inc Class A 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 Alphabet i.e., Alphabet and Mirae Asset go up and down completely randomly.

Pair Corralation between Alphabet and Mirae Asset

Assuming the 90 days trading horizon Alphabet Inc Class A is expected to generate 0.45 times more return on investment than Mirae Asset. However, Alphabet Inc Class A is 2.2 times less risky than Mirae Asset. It trades about 0.17 of its potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.03 per unit of risk. If you would invest  329,781  in Alphabet Inc Class A on October 25, 2024 and sell it today you would earn a total of  70,289  from holding Alphabet Inc Class A or generate 21.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Alphabet Inc Class A  vs.  Mirae Asset Daewoo

Alphabet Class A

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Inc Class A are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Alphabet displayed solid returns over the last few months and may actually be approaching a breakup point.

Mirae Asset Daewoo

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mirae Asset Daewoo are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mirae Asset may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Alphabet and Mirae Asset

The main advantage of trading using opposite Alphabet and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class A 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.