Correlation Between Mirae Asset and Nam Hwa
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Nam Hwa 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 Nam Hwa 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 Nam Hwa Construction, you can compare the effects of market volatilities on Mirae Asset and Nam Hwa 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 Nam Hwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Nam Hwa.
Diversification Opportunities for Mirae Asset and Nam Hwa
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mirae and Nam is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Nam Hwa Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nam Hwa Construction 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 Nam Hwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nam Hwa Construction has no effect on the direction of Mirae Asset i.e., Mirae Asset and Nam Hwa go up and down completely randomly.
Pair Corralation between Mirae Asset and Nam Hwa
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 0.7 times more return on investment than Nam Hwa. However, Mirae Asset Daewoo is 1.43 times less risky than Nam Hwa. It trades about 0.02 of its potential returns per unit of risk. Nam Hwa Construction is currently generating about -0.05 per unit of risk. If you would invest 403,039 in Mirae Asset Daewoo on September 26, 2024 and sell it today you would earn a total of 32,461 from holding Mirae Asset Daewoo or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Nam Hwa Construction
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Nam Hwa Construction |
Mirae Asset and Nam Hwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Nam Hwa
The main advantage of trading using opposite Mirae Asset and Nam Hwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Nam Hwa 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 Nam Hwa will offset losses from the drop in Nam Hwa'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 |
| Nam Hwa vs. Busan Industrial Co | Nam Hwa vs. Busan Ind | Nam Hwa vs. Mirae Asset Daewoo | Nam Hwa 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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