Correlation Between Dongbang Ship and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship 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 Dongbang Ship and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Ship Machinery and Mirae Asset Daewoo, you can compare the effects of market volatilities on Dongbang Ship 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 Dongbang Ship with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and Mirae Asset.
Diversification Opportunities for Dongbang Ship and Mirae Asset
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongbang and Mirae is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery 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 Dongbang Ship 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 Dongbang Ship Machinery 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 Dongbang Ship i.e., Dongbang Ship and Mirae Asset go up and down completely randomly.
Pair Corralation between Dongbang Ship and Mirae Asset
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to under-perform the Mirae Asset. But the stock apears to be less risky and, when comparing its historical volatility, Dongbang Ship Machinery is 2.27 times less risky than Mirae Asset. The stock trades about -0.02 of its potential returns per unit of risk. The Mirae Asset Daewoo is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 425,500 in Mirae Asset Daewoo on September 3, 2024 and sell it today you would earn a total of 22,500 from holding Mirae Asset Daewoo or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Ship Machinery vs. Mirae Asset Daewoo
Performance |
| Timeline |
| Dongbang Ship Machinery |
| Mirae Asset Daewoo |
Dongbang Ship and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and Mirae Asset
The main advantage of trading using opposite Dongbang Ship and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship 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.| Dongbang Ship vs. LG Display | Dongbang Ship vs. Hyundai Motor | Dongbang Ship vs. Hyundai Motor Co | Dongbang Ship vs. Hyundai Motor Co |
| Mirae Asset vs. Samlip General Foods | Mirae Asset vs. Pureun Mutual Savings | Mirae Asset vs. Sam Yang Foods | Mirae Asset vs. Samsung Life Insurance |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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