Correlation Between Mirae Asset and ACE KRX
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and ACE KRX 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 ACE KRX 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 ACE KRX Physical, you can compare the effects of market volatilities on Mirae Asset and ACE KRX 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 ACE KRX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and ACE KRX.
Diversification Opportunities for Mirae Asset and ACE KRX
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mirae and ACE is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and ACE KRX Physical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACE KRX Physical 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 ACE KRX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACE KRX Physical has no effect on the direction of Mirae Asset i.e., Mirae Asset and ACE KRX go up and down completely randomly.
Pair Corralation between Mirae Asset and ACE KRX
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 4.46 times more return on investment than ACE KRX. However, Mirae Asset is 4.46 times more volatile than ACE KRX Physical. It trades about 0.07 of its potential returns per unit of risk. ACE KRX Physical is currently generating about -0.05 per unit of risk. If you would invest 425,500 in Mirae Asset Daewoo on September 4, 2024 and sell it today you would earn a total of 26,500 from holding Mirae Asset Daewoo or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. ACE KRX Physical
Performance |
| Timeline |
| Mirae Asset Daewoo |
| ACE KRX Physical |
Mirae Asset and ACE KRX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and ACE KRX
The main advantage of trading using opposite Mirae Asset and ACE KRX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, ACE KRX 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 ACE KRX will offset losses from the drop in ACE KRX's long position.| Mirae Asset vs. Lotte Energy Materials | Mirae Asset vs. Koryo Credit Information | Mirae Asset vs. LAKE MATERIALS LTD | Mirae Asset vs. Jeju Bank |
| ACE KRX vs. Busan Industrial Co | ACE KRX vs. Busan Ind | ACE KRX vs. Mirae Asset Daewoo | ACE KRX vs. UNISEM Co |
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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