Correlation Between Mirae Asset and Posco Chemical
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Posco Chemical 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 Posco Chemical 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 Posco Chemical Co, you can compare the effects of market volatilities on Mirae Asset and Posco Chemical 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 Posco Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Posco Chemical.
Diversification Opportunities for Mirae Asset and Posco Chemical
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mirae and Posco is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Posco Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posco Chemical 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 Posco Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posco Chemical has no effect on the direction of Mirae Asset i.e., Mirae Asset and Posco Chemical go up and down completely randomly.
Pair Corralation between Mirae Asset and Posco Chemical
Assuming the 90 days trading horizon Mirae Asset is expected to generate 1.42 times less return on investment than Posco Chemical. But when comparing it to its historical volatility, Mirae Asset Daewoo is 2.29 times less risky than Posco Chemical. It trades about 0.03 of its potential returns per unit of risk. Posco Chemical Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 17,807,400 in Posco Chemical Co on September 13, 2024 and sell it today you would lose (1,247,400) from holding Posco Chemical Co or give up 7.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Posco Chemical Co
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Posco Chemical |
Mirae Asset and Posco Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Posco Chemical
The main advantage of trading using opposite Mirae Asset and Posco Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Posco Chemical 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 Posco Chemical will offset losses from the drop in Posco Chemical's long position.| Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. LG Energy Solution | Mirae Asset vs. SK Hynix |
| Posco Chemical vs. Dong A Steel Technology | Posco Chemical vs. Netmarble Games Corp | Posco Chemical vs. Guyoung Technology Co | Posco Chemical vs. Hwangkum Steel Technology |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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