Correlation Between Solution Advanced and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both Solution Advanced 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 Solution Advanced and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Advanced Technology and Mirae Asset Daewoo, you can compare the effects of market volatilities on Solution Advanced 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 Solution Advanced with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and Mirae Asset.
Diversification Opportunities for Solution Advanced and Mirae Asset
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solution and Mirae is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology 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 Solution Advanced 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 Solution Advanced Technology 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 Solution Advanced i.e., Solution Advanced and Mirae Asset go up and down completely randomly.
Pair Corralation between Solution Advanced and Mirae Asset
Assuming the 90 days trading horizon Solution Advanced is expected to generate 1.82 times less return on investment than Mirae Asset. But when comparing it to its historical volatility, Solution Advanced Technology is 3.68 times less risky than Mirae Asset. It trades about 0.14 of its potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 425,500 in Mirae Asset Daewoo on September 4, 2024 and sell it today you would earn a total of 26,500 from holding Mirae Asset Daewoo or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. Mirae Asset Daewoo
Performance |
| Timeline |
| Solution Advanced |
| Mirae Asset Daewoo |
Solution Advanced and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and Mirae Asset
The main advantage of trading using opposite Solution Advanced and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced 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.| Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. LG Energy Solution | Solution Advanced vs. SK Hynix |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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