Correlation Between Mirae Asset and DreamCIS
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and DreamCIS 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 DreamCIS 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 DreamCIS, you can compare the effects of market volatilities on Mirae Asset and DreamCIS 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 DreamCIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and DreamCIS.
Diversification Opportunities for Mirae Asset and DreamCIS
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mirae and DreamCIS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and DreamCIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DreamCIS 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 DreamCIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DreamCIS has no effect on the direction of Mirae Asset i.e., Mirae Asset and DreamCIS go up and down completely randomly.
Pair Corralation between Mirae Asset and DreamCIS
Assuming the 90 days trading horizon Mirae Asset is expected to generate 3.39 times less return on investment than DreamCIS. But when comparing it to its historical volatility, Mirae Asset Daewoo is 2.77 times less risky than DreamCIS. It trades about 0.02 of its potential returns per unit of risk. DreamCIS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 263,750 in DreamCIS on September 3, 2024 and sell it today you would earn a total of 41,250 from holding DreamCIS or generate 15.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. DreamCIS
Performance |
| Timeline |
| Mirae Asset Daewoo |
| DreamCIS |
Mirae Asset and DreamCIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and DreamCIS
The main advantage of trading using opposite Mirae Asset and DreamCIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, DreamCIS 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 DreamCIS will offset losses from the drop in DreamCIS's long position.| Mirae Asset vs. Samlip General Foods | Mirae Asset vs. Pureun Mutual Savings | Mirae Asset vs. Sam Yang Foods | Mirae Asset vs. Samsung Life Insurance |
| DreamCIS vs. Ssangyong Information Communication | DreamCIS vs. Korea Information Communications | DreamCIS vs. Netmarble Games Corp | DreamCIS vs. Iljin Display |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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