Correlation Between Guyoung Technology and Dreamus
Can any of the company-specific risk be diversified away by investing in both Guyoung Technology and Dreamus 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 Guyoung Technology and Dreamus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guyoung Technology Co and Dreamus Company, you can compare the effects of market volatilities on Guyoung Technology and Dreamus 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 Guyoung Technology with a short position of Dreamus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guyoung Technology and Dreamus.
Diversification Opportunities for Guyoung Technology and Dreamus
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guyoung and Dreamus is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Guyoung Technology Co and Dreamus Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreamus Company and Guyoung Technology 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 Guyoung Technology Co are associated (or correlated) with Dreamus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreamus Company has no effect on the direction of Guyoung Technology i.e., Guyoung Technology and Dreamus go up and down completely randomly.
Pair Corralation between Guyoung Technology and Dreamus
Assuming the 90 days trading horizon Guyoung Technology Co is expected to generate 1.11 times more return on investment than Dreamus. However, Guyoung Technology is 1.11 times more volatile than Dreamus Company. It trades about 0.25 of its potential returns per unit of risk. Dreamus Company is currently generating about 0.05 per unit of risk. If you would invest 205,000 in Guyoung Technology Co on November 6, 2024 and sell it today you would earn a total of 21,500 from holding Guyoung Technology Co or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guyoung Technology Co vs. Dreamus Company
Performance |
| Timeline |
| Guyoung Technology |
| Dreamus Company |
Guyoung Technology and Dreamus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guyoung Technology and Dreamus
The main advantage of trading using opposite Guyoung Technology and Dreamus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guyoung Technology position performs unexpectedly, Dreamus 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 Dreamus will offset losses from the drop in Dreamus' long position.| Guyoung Technology vs. Lotte Chilsung Beverage | Guyoung Technology vs. DB Insurance Co | Guyoung Technology vs. Kisan Telecom Co | Guyoung Technology vs. Sam Yang Foods |
| Dreamus vs. Samsung Electronics Co | Dreamus vs. Samsung Electronics Co | Dreamus vs. Hyundai Motor Co | Dreamus vs. Hyundai Motor |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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