Correlation Between Dow Jones and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Mirae Asset Daewoo, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mirae Asset.
Diversification Opportunities for Dow Jones and Mirae Asset
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Mirae is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Mirae Asset go up and down completely randomly.
Pair Corralation between Dow Jones and Mirae Asset
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.66 times more return on investment than Mirae Asset. However, Dow Jones Industrial is 1.51 times less risky than Mirae Asset. It trades about 0.08 of its potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.03 per unit of risk. If you would invest 3,394,901 in Dow Jones Industrial on October 30, 2024 and sell it today you would earn a total of 1,076,457 from holding Dow Jones Industrial or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.57% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mirae Asset Daewoo
Performance |
| Timeline |
Dow Jones and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mirae Asset Daewoo
Pair trading matchups for Mirae Asset
Pair Trading with Dow Jones and Mirae Asset
The main advantage of trading using opposite Dow Jones and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Snap On | Dow Jones vs. Hillman Solutions Corp | Dow Jones vs. RBC Bearings Incorporated | Dow Jones vs. Rocky Brands |
| Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. Samsung Electronics Co | Mirae Asset vs. LG Energy Solution | Mirae Asset vs. SK Hynix |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |