Correlation Between Mirae Asset and Hankook Furniture
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Hankook Furniture 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 Hankook Furniture 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 Hankook Furniture Co, you can compare the effects of market volatilities on Mirae Asset and Hankook Furniture 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 Hankook Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Hankook Furniture.
Diversification Opportunities for Mirae Asset and Hankook Furniture
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mirae and Hankook is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Hankook Furniture Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hankook Furniture 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 Hankook Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hankook Furniture has no effect on the direction of Mirae Asset i.e., Mirae Asset and Hankook Furniture go up and down completely randomly.
Pair Corralation between Mirae Asset and Hankook Furniture
Assuming the 90 days trading horizon Mirae Asset is expected to generate 1.1 times less return on investment than Hankook Furniture. In addition to that, Mirae Asset is 3.21 times more volatile than Hankook Furniture Co. It trades about 0.04 of its total potential returns per unit of risk. Hankook Furniture Co is currently generating about 0.14 per unit of volatility. If you would invest 371,481 in Hankook Furniture Co on August 29, 2024 and sell it today you would earn a total of 40,019 from holding Hankook Furniture Co or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Hankook Furniture Co
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Hankook Furniture |
Mirae Asset and Hankook Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Hankook Furniture
The main advantage of trading using opposite Mirae Asset and Hankook Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Hankook Furniture 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 Hankook Furniture will offset losses from the drop in Hankook Furniture's long position.| Mirae Asset vs. Hana Technology Co | Mirae Asset vs. Daejung Chemicals Metals | Mirae Asset vs. PJ Metal Co | Mirae Asset vs. Eagle Veterinary Technology |
| Hankook Furniture vs. KMH Hitech Co | Hankook Furniture vs. GemVaxKAEL CoLtd | Hankook Furniture vs. Busan Industrial Co | Hankook Furniture vs. Busan Ind |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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