Correlation Between LAKE MATERIALS and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both LAKE MATERIALS 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 LAKE MATERIALS and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAKE MATERIALS LTD and Mirae Asset Daewoo, you can compare the effects of market volatilities on LAKE MATERIALS 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 LAKE MATERIALS with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAKE MATERIALS and Mirae Asset.
Diversification Opportunities for LAKE MATERIALS and Mirae Asset
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LAKE and Mirae is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding LAKE MATERIALS LTD 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 LAKE MATERIALS 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 LAKE MATERIALS LTD 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 LAKE MATERIALS i.e., LAKE MATERIALS and Mirae Asset go up and down completely randomly.
Pair Corralation between LAKE MATERIALS and Mirae Asset
Assuming the 90 days trading horizon LAKE MATERIALS LTD is expected to under-perform the Mirae Asset. But the stock apears to be less risky and, when comparing its historical volatility, LAKE MATERIALS LTD is 2.07 times less risky than Mirae Asset. The stock trades about -0.26 of its potential returns per unit of risk. The Mirae Asset Daewoo is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 428,000 in Mirae Asset Daewoo on September 12, 2024 and sell it today you would earn a total of 17,000 from holding Mirae Asset Daewoo or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LAKE MATERIALS LTD vs. Mirae Asset Daewoo
Performance |
| Timeline |
| LAKE MATERIALS LTD |
| Mirae Asset Daewoo |
LAKE MATERIALS and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAKE MATERIALS and Mirae Asset
The main advantage of trading using opposite LAKE MATERIALS and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAKE MATERIALS 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.| LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. Samsung Electronics Co | LAKE MATERIALS vs. LG Energy Solution | LAKE MATERIALS vs. SK Hynix |
| Mirae Asset vs. Hanjoo Light Metal | Mirae Asset vs. Youngsin Metal Industrial | Mirae Asset vs. Dongwon Metal Co | Mirae Asset vs. DONGKUK TED METAL |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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