Correlation Between AfreecaTV and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both AfreecaTV 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 AfreecaTV and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AfreecaTV Co and Mirae Asset Daewoo, you can compare the effects of market volatilities on AfreecaTV 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 AfreecaTV with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of AfreecaTV and Mirae Asset.
Diversification Opportunities for AfreecaTV and Mirae Asset
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between AfreecaTV and Mirae is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding AfreecaTV 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 AfreecaTV 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 AfreecaTV 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 AfreecaTV i.e., AfreecaTV and Mirae Asset go up and down completely randomly.
Pair Corralation between AfreecaTV and Mirae Asset
Assuming the 90 days trading horizon AfreecaTV Co is expected to under-perform the Mirae Asset. But the stock apears to be less risky and, when comparing its historical volatility, AfreecaTV Co is 1.8 times less risky than Mirae Asset. The stock trades about -0.05 of its potential returns per unit of risk. The Mirae Asset Daewoo is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 425,000 in Mirae Asset Daewoo on August 25, 2024 and sell it today you would earn a total of 15,000 from holding Mirae Asset Daewoo or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AfreecaTV Co vs. Mirae Asset Daewoo
Performance |
| Timeline |
| AfreecaTV |
| Mirae Asset Daewoo |
AfreecaTV and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AfreecaTV and Mirae Asset
The main advantage of trading using opposite AfreecaTV and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AfreecaTV 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.The idea behind AfreecaTV Co and Mirae Asset Daewoo pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. LG Energy Solution | Mirae Asset vs. SK Hynix |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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