Correlation Between Mirae Asset and Busan Ind
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Busan Ind 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 Busan Ind 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 Busan Ind, you can compare the effects of market volatilities on Mirae Asset and Busan Ind 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 Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Busan Ind.
Diversification Opportunities for Mirae Asset and Busan Ind
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mirae and Busan is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind 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 Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of Mirae Asset i.e., Mirae Asset and Busan Ind go up and down completely randomly.
Pair Corralation between Mirae Asset and Busan Ind
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 0.73 times more return on investment than Busan Ind. However, Mirae Asset Daewoo is 1.37 times less risky than Busan Ind. It trades about 0.02 of its potential returns per unit of risk. Busan Ind is currently generating about -0.03 per unit of risk. If you would invest 400,422 in Mirae Asset Daewoo on August 24, 2024 and sell it today you would earn a total of 39,578 from holding Mirae Asset Daewoo or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Busan Ind
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Busan Ind |
Mirae Asset and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Busan Ind
The main advantage of trading using opposite Mirae Asset and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Busan Ind 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 Busan Ind will offset losses from the drop in Busan Ind's long position.| Mirae Asset vs. Korea Information Communications | Mirae Asset vs. Shinsegae Information Communication | Mirae Asset vs. Nice Information Telecommunication | Mirae Asset vs. Dongwon Metal Co |
| Busan Ind vs. Daekyung Machinery Engineering | Busan Ind vs. Shinsegae Engineering Construction | Busan Ind vs. RF Materials Co | Busan Ind vs. Top Material Co |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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