Correlation Between Mirae Asset and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Lotte Data 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 Lotte Data 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 Lotte Data Communication, you can compare the effects of market volatilities on Mirae Asset and Lotte Data 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 Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Lotte Data.
Diversification Opportunities for Mirae Asset and Lotte Data
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mirae and Lotte is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Lotte Data Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Data Communication 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 Lotte Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Data Communication has no effect on the direction of Mirae Asset i.e., Mirae Asset and Lotte Data go up and down completely randomly.
Pair Corralation between Mirae Asset and Lotte Data
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 2.68 times more return on investment than Lotte Data. However, Mirae Asset is 2.68 times more volatile than Lotte Data Communication. It trades about 0.06 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.2 per unit of risk. If you would invest 425,000 in Mirae Asset Daewoo on September 2, 2024 and sell it today you would earn a total of 23,000 from holding Mirae Asset Daewoo or generate 5.41% 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. Lotte Data Communication
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Lotte Data Communication |
Mirae Asset and Lotte Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Lotte Data
The main advantage of trading using opposite Mirae Asset and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Lotte Data 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 Lotte Data will offset losses from the drop in Lotte Data'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 |
| Lotte Data vs. Digital Power Communications | Lotte Data vs. Wireless Power Amplifier | Lotte Data vs. Daejung Chemicals Metals | Lotte Data vs. Heungkuk Metaltech CoLtd |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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