Correlation Between Mirae Asset and Settlebank
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Settlebank 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 Settlebank 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 Settlebank, you can compare the effects of market volatilities on Mirae Asset and Settlebank 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 Settlebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Settlebank.
Diversification Opportunities for Mirae Asset and Settlebank
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mirae and Settlebank is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Settlebank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Settlebank 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 Settlebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Settlebank has no effect on the direction of Mirae Asset i.e., Mirae Asset and Settlebank go up and down completely randomly.
Pair Corralation between Mirae Asset and Settlebank
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 2.51 times more return on investment than Settlebank. However, Mirae Asset is 2.51 times more volatile than Settlebank. It trades about 0.05 of its potential returns per unit of risk. Settlebank is currently generating about -0.06 per unit of risk. If you would invest 425,500 in Mirae Asset Daewoo on August 25, 2024 and sell it today you would earn a total of 14,500 from holding Mirae Asset Daewoo or generate 3.41% 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. Settlebank
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Settlebank |
Mirae Asset and Settlebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Settlebank
The main advantage of trading using opposite Mirae Asset and Settlebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Settlebank 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 Settlebank will offset losses from the drop in Settlebank's long position.| Mirae Asset vs. Korea Information Communications | Mirae Asset vs. Shinsegae Information Communication | Mirae Asset vs. Nice Information Telecommunication | Mirae Asset vs. Dongwon Metal Co |
| Settlebank vs. Playgram Co | Settlebank vs. MediaZen | Settlebank vs. DC Media Co | Settlebank vs. Woori Technology |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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