Correlation Between BGF Retail and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both BGF Retail 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 BGF Retail and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Mirae Asset Daewoo, you can compare the effects of market volatilities on BGF Retail 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 BGF Retail with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Mirae Asset.
Diversification Opportunities for BGF Retail and Mirae Asset
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BGF and Mirae is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail 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 BGF Retail 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 BGF Retail 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 BGF Retail i.e., BGF Retail and Mirae Asset go up and down completely randomly.
Pair Corralation between BGF Retail and Mirae Asset
Assuming the 90 days trading horizon BGF Retail Co is expected to under-perform the Mirae Asset. In addition to that, BGF Retail is 1.5 times more volatile than Mirae Asset Daewoo. It trades about -0.02 of its total potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.05 per unit of volatility. If you would invest 368,500 in Mirae Asset Daewoo on September 3, 2024 and sell it today you would earn a total of 33,500 from holding Mirae Asset Daewoo or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Mirae Asset Daewoo
Performance |
| Timeline |
| BGF Retail |
| Mirae Asset Daewoo |
BGF Retail and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Mirae Asset
The main advantage of trading using opposite BGF Retail and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail 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.| BGF Retail vs. LG Display | BGF Retail vs. Hyundai Motor | BGF Retail vs. Hyundai Motor Co | BGF Retail vs. Hyundai Motor Co |
| Mirae Asset vs. ChipsMedia | Mirae Asset vs. Kisan Telecom Co | Mirae Asset vs. T3 Entertainment Co | Mirae Asset vs. MEDIANA CoLtd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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