Correlation Between KMH Hitech and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both KMH Hitech 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 KMH Hitech and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KMH Hitech Co and Mirae Asset Daewoo, you can compare the effects of market volatilities on KMH Hitech 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 KMH Hitech with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of KMH Hitech and Mirae Asset.
Diversification Opportunities for KMH Hitech and Mirae Asset
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between KMH and Mirae is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding KMH Hitech Co 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 KMH Hitech 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 KMH Hitech Co 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 KMH Hitech i.e., KMH Hitech and Mirae Asset go up and down completely randomly.
Pair Corralation between KMH Hitech and Mirae Asset
Assuming the 90 days trading horizon KMH Hitech Co is expected to generate 1.3 times more return on investment than Mirae Asset. However, KMH Hitech is 1.3 times more volatile than Mirae Asset Daewoo. It trades about 0.46 of its potential returns per unit of risk. Mirae Asset Daewoo is currently generating about -0.16 per unit of risk. If you would invest 85,300 in KMH Hitech Co on October 13, 2024 and sell it today you would earn a total of 10,300 from holding KMH Hitech Co or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KMH Hitech Co vs. Mirae Asset Daewoo
Performance |
| Timeline |
| KMH Hitech |
| Mirae Asset Daewoo |
KMH Hitech and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KMH Hitech and Mirae Asset
The main advantage of trading using opposite KMH Hitech and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KMH Hitech 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.| KMH Hitech vs. Hyundai Home Shopping | KMH Hitech vs. Samyang Foods Co | KMH Hitech vs. Innowireless Co | KMH Hitech vs. Mobileleader CoLtd |
| Mirae Asset vs. Korean Air Lines | Mirae Asset vs. LG Display Co | Mirae Asset vs. Dongil Metal Co | Mirae Asset vs. Iljin Display |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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