Correlation Between Samwha Electronics and Dream Security
Can any of the company-specific risk be diversified away by investing in both Samwha Electronics and Dream Security 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 Samwha Electronics and Dream Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samwha Electronics Co and Dream Security co, you can compare the effects of market volatilities on Samwha Electronics and Dream Security 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 Samwha Electronics with a short position of Dream Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samwha Electronics and Dream Security.
Diversification Opportunities for Samwha Electronics and Dream Security
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Samwha and Dream is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Samwha Electronics Co and Dream Security co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Security co and Samwha Electronics 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 Samwha Electronics Co are associated (or correlated) with Dream Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Security co has no effect on the direction of Samwha Electronics i.e., Samwha Electronics and Dream Security go up and down completely randomly.
Pair Corralation between Samwha Electronics and Dream Security
Assuming the 90 days trading horizon Samwha Electronics Co is expected to generate 1.85 times more return on investment than Dream Security. However, Samwha Electronics is 1.85 times more volatile than Dream Security co. It trades about 0.04 of its potential returns per unit of risk. Dream Security co is currently generating about 0.02 per unit of risk. If you would invest 270,501 in Samwha Electronics Co on October 14, 2024 and sell it today you would earn a total of 81,999 from holding Samwha Electronics Co or generate 30.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Samwha Electronics Co vs. Dream Security co
Performance |
| Timeline |
| Samwha Electronics |
| Dream Security co |
Samwha Electronics and Dream Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samwha Electronics and Dream Security
The main advantage of trading using opposite Samwha Electronics and Dream Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samwha Electronics position performs unexpectedly, Dream Security 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 Dream Security will offset losses from the drop in Dream Security's long position.| Samwha Electronics vs. KEPCO Engineering Construction | Samwha Electronics vs. Dongkuk Structures Construction | Samwha Electronics vs. Cuckoo Electronics Co | Samwha Electronics vs. Hannong Chemicals |
| Dream Security vs. Cuckoo Electronics Co | Dream Security vs. Vissem Electronics Co | Dream Security vs. Daewoo Electronic Components | Dream Security vs. Samwha Electronics Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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