Correlation Between Mirae Asset and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on Mirae Asset and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Dongwoo Farm.
Diversification Opportunities for Mirae Asset and Dongwoo Farm
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mirae and Dongwoo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Mirae Asset i.e., Mirae Asset and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Mirae Asset and Dongwoo Farm
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 5.12 times more return on investment than Dongwoo Farm. However, Mirae Asset is 5.12 times more volatile than Dongwoo Farm To. It trades about 0.07 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about -0.12 per unit of risk. If you would invest 426,500 in Mirae Asset Daewoo on August 31, 2024 and sell it today you would earn a total of 25,500 from holding Mirae Asset Daewoo or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Dongwoo Farm To
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Dongwoo Farm To |
Mirae Asset and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Dongwoo Farm
The main advantage of trading using opposite Mirae Asset and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm's long position.| Mirae Asset vs. RF Materials Co | Mirae Asset vs. EV Advanced Material | Mirae Asset vs. TOPMATERIAL LTD | Mirae Asset vs. PI Advanced Materials |
| Dongwoo Farm vs. Maeil Dairies Co | Dongwoo Farm vs. Busan Industrial Co | Dongwoo Farm vs. Busan Ind | Dongwoo Farm vs. Mirae Asset Daewoo |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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