Correlation Between Dreamus and Atec
Can any of the company-specific risk be diversified away by investing in both Dreamus and Atec 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 Dreamus and Atec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreamus Company and Atec Co, you can compare the effects of market volatilities on Dreamus and Atec 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 Dreamus with a short position of Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreamus and Atec.
Diversification Opportunities for Dreamus and Atec
Very good diversification
The 3 months correlation between Dreamus and Atec is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dreamus Company and Atec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec and Dreamus 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 Dreamus Company are associated (or correlated) with Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec has no effect on the direction of Dreamus i.e., Dreamus and Atec go up and down completely randomly.
Pair Corralation between Dreamus and Atec
Assuming the 90 days trading horizon Dreamus Company is expected to under-perform the Atec. But the stock apears to be less risky and, when comparing its historical volatility, Dreamus Company is 1.51 times less risky than Atec. The stock trades about -0.05 of its potential returns per unit of risk. The Atec Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,287,830 in Atec Co on September 14, 2024 and sell it today you would earn a total of 2,107,170 from holding Atec Co or generate 163.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreamus Company vs. Atec Co
Performance |
| Timeline |
| Dreamus Company |
| Atec |
Dreamus and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreamus and Atec
The main advantage of trading using opposite Dreamus and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreamus position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| Dreamus vs. Polaris Office Corp | Dreamus vs. CKH Food Health | Dreamus vs. CU Medical Systems | Dreamus vs. Hanjin Transportation Co |
| Atec vs. Digital Power Communications | Atec vs. Lotte Data Communication | Atec vs. Seoul Electronics Telecom | Atec vs. Korea Information Communications |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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