Correlation Between Mirae Asset and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Hanwha Life 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 Hanwha Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirae Asset Daewoo and Hanwha Life Insurance, you can compare the effects of market volatilities on Mirae Asset and Hanwha Life 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 Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Hanwha Life.
Diversification Opportunities for Mirae Asset and Hanwha Life
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mirae and Hanwha is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance 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 Daewoo are associated (or correlated) with Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Mirae Asset i.e., Mirae Asset and Hanwha Life go up and down completely randomly.
Pair Corralation between Mirae Asset and Hanwha Life
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 0.9 times more return on investment than Hanwha Life. However, Mirae Asset Daewoo is 1.11 times less risky than Hanwha Life. It trades about 0.03 of its potential returns per unit of risk. Hanwha Life Insurance is currently generating about 0.0 per unit of risk. If you would invest 675,259 in Mirae Asset Daewoo on October 9, 2024 and sell it today you would earn a total of 138,741 from holding Mirae Asset Daewoo or generate 20.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Hanwha Life Insurance
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Hanwha Life Insurance |
Mirae Asset and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Hanwha Life
The main advantage of trading using opposite Mirae Asset and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Hanwha Life 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 Hanwha Life will offset losses from the drop in Hanwha Life's long position.| Mirae Asset vs. Hana Financial | Mirae Asset vs. Woori Financial Group | Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. Samsung Electronics Co |
| Hanwha Life vs. Jeju Bank | Hanwha Life vs. Koryo Credit Information | Hanwha Life vs. Youngchang Chemical Co | Hanwha Life vs. TK Chemical |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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