Correlation Between Automobile and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both Automobile and Mirae Asset 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 Automobile and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and Mirae Asset Daewoo, you can compare the effects of market volatilities on Automobile and Mirae Asset 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 Automobile with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and Mirae Asset.
Diversification Opportunities for Automobile and Mirae Asset
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Automobile and Mirae is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and Mirae Asset Daewoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirae Asset Daewoo and Automobile 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 Automobile Pc are associated (or correlated) with Mirae Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirae Asset Daewoo has no effect on the direction of Automobile i.e., Automobile and Mirae Asset go up and down completely randomly.
Pair Corralation between Automobile and Mirae Asset
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the Mirae Asset. In addition to that, Automobile is 2.09 times more volatile than Mirae Asset Daewoo. It trades about -0.19 of its total potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.18 per unit of volatility. If you would invest 814,000 in Mirae Asset Daewoo on November 4, 2024 and sell it today you would earn a total of 29,000 from holding Mirae Asset Daewoo or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automobile Pc vs. Mirae Asset Daewoo
Performance |
| Timeline |
| Automobile Pc |
| Mirae Asset Daewoo |
Automobile and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and Mirae Asset
The main advantage of trading using opposite Automobile and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile position performs unexpectedly, Mirae Asset 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 Mirae Asset will offset losses from the drop in Mirae Asset's long position.| Automobile vs. Kyung In Synthetic Corp | Automobile vs. Youngchang Chemical Co | Automobile vs. DONGKUK TED METAL | Automobile vs. Tae Kyung Chemical |
| Mirae Asset vs. KB Financial Group | Mirae Asset vs. Shinhan Financial Group | Mirae Asset vs. Hana Financial | Mirae Asset vs. Woori Financial Group |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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