Correlation Between Mirae Asset and INSUN Environmental
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and INSUN Environmental 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 INSUN Environmental 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 INSUN Environmental New, you can compare the effects of market volatilities on Mirae Asset and INSUN Environmental 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 INSUN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and INSUN Environmental.
Diversification Opportunities for Mirae Asset and INSUN Environmental
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mirae and INSUN is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and INSUN Environmental New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSUN Environmental New 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 INSUN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSUN Environmental New has no effect on the direction of Mirae Asset i.e., Mirae Asset and INSUN Environmental go up and down completely randomly.
Pair Corralation between Mirae Asset and INSUN Environmental
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to under-perform the INSUN Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Mirae Asset Daewoo is 1.11 times less risky than INSUN Environmental. The stock trades about -0.24 of its potential returns per unit of risk. The INSUN Environmental New is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 491,500 in INSUN Environmental New on October 13, 2024 and sell it today you would earn a total of 78,500 from holding INSUN Environmental New or generate 15.97% 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. INSUN Environmental New
Performance |
| Timeline |
| Mirae Asset Daewoo |
| INSUN Environmental New |
Mirae Asset and INSUN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and INSUN Environmental
The main advantage of trading using opposite Mirae Asset and INSUN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, INSUN Environmental 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 INSUN Environmental will offset losses from the drop in INSUN Environmental's long position.| Mirae Asset vs. EV Advanced Material | Mirae Asset vs. PI Advanced Materials | Mirae Asset vs. Hyundai Engineering Plastics | Mirae Asset vs. Hyosung Advanced Materials |
| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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