Correlation Between Mirae Asset and Sungdo Engineering
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Sungdo Engineering 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 Sungdo Engineering 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 Sungdo Engineering Construction, you can compare the effects of market volatilities on Mirae Asset and Sungdo Engineering 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 Sungdo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Sungdo Engineering.
Diversification Opportunities for Mirae Asset and Sungdo Engineering
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mirae and Sungdo is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Sungdo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungdo Engineering 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 Sungdo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungdo Engineering has no effect on the direction of Mirae Asset i.e., Mirae Asset and Sungdo Engineering go up and down completely randomly.
Pair Corralation between Mirae Asset and Sungdo Engineering
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 0.82 times more return on investment than Sungdo Engineering. However, Mirae Asset Daewoo is 1.21 times less risky than Sungdo Engineering. It trades about 0.04 of its potential returns per unit of risk. Sungdo Engineering Construction is currently generating about 0.03 per unit of risk. If you would invest 392,500 in Mirae Asset Daewoo on September 26, 2024 and sell it today you would earn a total of 43,000 from holding Mirae Asset Daewoo or generate 10.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Sungdo Engineering Constructio
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Sungdo Engineering |
Mirae Asset and Sungdo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Sungdo Engineering
The main advantage of trading using opposite Mirae Asset and Sungdo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Sungdo Engineering 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 Sungdo Engineering will offset losses from the drop in Sungdo Engineering'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 |
| Sungdo Engineering vs. Busan Industrial Co | Sungdo Engineering vs. Busan Ind | Sungdo Engineering vs. Mirae Asset Daewoo | Sungdo Engineering vs. Shinhan WTI Futures |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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