Correlation Between Mirae Asset and AfreecaTV
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and AfreecaTV 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 Mirae Asset and AfreecaTV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirae Asset No2 and AfreecaTV Co, you can compare the effects of market volatilities on Mirae Asset and AfreecaTV 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 Mirae Asset with a short position of AfreecaTV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and AfreecaTV.
Diversification Opportunities for Mirae Asset and AfreecaTV
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mirae and AfreecaTV is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset No2 and AfreecaTV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfreecaTV and Mirae Asset 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 Mirae Asset No2 are associated (or correlated) with AfreecaTV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfreecaTV has no effect on the direction of Mirae Asset i.e., Mirae Asset and AfreecaTV go up and down completely randomly.
Pair Corralation between Mirae Asset and AfreecaTV
Assuming the 90 days trading horizon Mirae Asset No2 is expected to under-perform the AfreecaTV. But the stock apears to be less risky and, when comparing its historical volatility, Mirae Asset No2 is 1.19 times less risky than AfreecaTV. The stock trades about -0.05 of its potential returns per unit of risk. The AfreecaTV Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 11,430,000 in AfreecaTV Co on August 28, 2024 and sell it today you would lose (1,620,000) from holding AfreecaTV Co or give up 14.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset No2 vs. AfreecaTV Co
Performance |
| Timeline |
| Mirae Asset No2 |
| AfreecaTV |
Mirae Asset and AfreecaTV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and AfreecaTV
The main advantage of trading using opposite Mirae Asset and AfreecaTV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, AfreecaTV 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 AfreecaTV will offset losses from the drop in AfreecaTV's long position.The idea behind Mirae Asset No2 and AfreecaTV Co 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.| AfreecaTV vs. SS TECH | AfreecaTV vs. Busan Industrial Co | AfreecaTV vs. Busan Ind | AfreecaTV vs. Mirae Asset Daewoo |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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