Correlation Between Woorim Machinery and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both Woorim Machinery 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 Woorim Machinery and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woorim Machinery Co and Mirae Asset Daewoo, you can compare the effects of market volatilities on Woorim Machinery 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 Woorim Machinery with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woorim Machinery and Mirae Asset.
Diversification Opportunities for Woorim Machinery and Mirae Asset
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Woorim and Mirae is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Woorim Machinery 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 Woorim Machinery 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 Woorim Machinery 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 Woorim Machinery i.e., Woorim Machinery and Mirae Asset go up and down completely randomly.
Pair Corralation between Woorim Machinery and Mirae Asset
Assuming the 90 days trading horizon Woorim Machinery Co is expected to generate 3.89 times more return on investment than Mirae Asset. However, Woorim Machinery is 3.89 times more volatile than Mirae Asset Daewoo. It trades about 0.26 of its potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.05 per unit of risk. If you would invest 476,000 in Woorim Machinery Co on October 25, 2024 and sell it today you would earn a total of 82,000 from holding Woorim Machinery Co or generate 17.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woorim Machinery Co vs. Mirae Asset Daewoo
Performance |
| Timeline |
| Woorim Machinery |
| Mirae Asset Daewoo |
Woorim Machinery and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woorim Machinery and Mirae Asset
The main advantage of trading using opposite Woorim Machinery and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woorim Machinery 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.| Woorim Machinery vs. Samsung Electronics Co | Woorim Machinery vs. Samsung Electronics Co | Woorim Machinery vs. KB Financial Group | Woorim Machinery vs. Shinhan Financial Group |
| Mirae Asset vs. Solus Advanced Materials | Mirae Asset vs. Narae Nanotech Corp | Mirae Asset vs. Orbitech Co | Mirae Asset vs. Lake Materials 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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