Correlation Between Mirae Asset and Hanwha ARIRANG
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and Hanwha ARIRANG 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 Hanwha ARIRANG 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 Hanwha ARIRANG KTB, you can compare the effects of market volatilities on Mirae Asset and Hanwha ARIRANG 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 Hanwha ARIRANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and Hanwha ARIRANG.
Diversification Opportunities for Mirae Asset and Hanwha ARIRANG
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mirae and Hanwha is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and Hanwha ARIRANG KTB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha ARIRANG KTB 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 Hanwha ARIRANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha ARIRANG KTB has no effect on the direction of Mirae Asset i.e., Mirae Asset and Hanwha ARIRANG go up and down completely randomly.
Pair Corralation between Mirae Asset and Hanwha ARIRANG
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 3.35 times more return on investment than Hanwha ARIRANG. However, Mirae Asset is 3.35 times more volatile than Hanwha ARIRANG KTB. It trades about 0.32 of its potential returns per unit of risk. Hanwha ARIRANG KTB is currently generating about 0.22 per unit of risk. If you would invest 444,000 in Mirae Asset Daewoo on November 29, 2024 and sell it today you would earn a total of 21,000 from holding Mirae Asset Daewoo or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. Hanwha ARIRANG KTB
Performance |
| Timeline |
| Mirae Asset Daewoo |
| Hanwha ARIRANG KTB |
Mirae Asset and Hanwha ARIRANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and Hanwha ARIRANG
The main advantage of trading using opposite Mirae Asset and Hanwha ARIRANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, Hanwha ARIRANG 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 Hanwha ARIRANG will offset losses from the drop in Hanwha ARIRANG's long position.| Mirae Asset vs. Ecoplastic | Mirae Asset vs. National Plastic Co | Mirae Asset vs. ADTechnology CoLtd | Mirae Asset vs. Puloon Technology |
| Hanwha ARIRANG vs. Busan Industrial Co | Hanwha ARIRANG vs. Mirae Asset Daewoo | Hanwha ARIRANG vs. RPBio Inc | Hanwha ARIRANG vs. Finebesteel |
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 Stocks Directory module to find actively traded stocks across global markets.
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