Correlation Between Mirae Asset and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Mirae Asset and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Incar Financial.
Diversification Opportunities for Mirae Asset and Incar Financial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mirae and Incar is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Mirae Asset i.e., Mirae Asset and Incar Financial go up and down completely randomly.
Pair Corralation between Mirae Asset and Incar Financial
Assuming the 90 days trading horizon Mirae Asset is expected to generate 5.29 times less return on investment than Incar Financial. But when comparing it to its historical volatility, Mirae Asset Daewoo is 2.77 times less risky than Incar Financial. It trades about 0.02 of its potential returns per unit of risk. Incar Financial Service is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 653,406 in Incar Financial Service on August 29, 2024 and sell it today you would lose (37,406) from holding Incar Financial Service or give up 5.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.93% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Incar Financial Service
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Incar Financial Service |
Mirae Asset and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Incar Financial
The main advantage of trading using opposite Mirae Asset and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial'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 |
| Incar Financial vs. Hanjinkal | Incar Financial vs. Busan Industrial Co | Incar Financial vs. Busan Ind | Incar Financial 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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