Correlation Between Dreamus and Seoul Semiconductor
Can any of the company-specific risk be diversified away by investing in both Dreamus and Seoul Semiconductor 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 Seoul Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreamus Company and Seoul Semiconductor Co, you can compare the effects of market volatilities on Dreamus and Seoul Semiconductor 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 Seoul Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreamus and Seoul Semiconductor.
Diversification Opportunities for Dreamus and Seoul Semiconductor
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreamus and Seoul is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dreamus Company and Seoul Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Semiconductor 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 Seoul Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Semiconductor has no effect on the direction of Dreamus i.e., Dreamus and Seoul Semiconductor go up and down completely randomly.
Pair Corralation between Dreamus and Seoul Semiconductor
Assuming the 90 days trading horizon Dreamus Company is expected to under-perform the Seoul Semiconductor. In addition to that, Dreamus is 1.76 times more volatile than Seoul Semiconductor Co. It trades about -0.02 of its total potential returns per unit of risk. Seoul Semiconductor Co is currently generating about -0.03 per unit of volatility. If you would invest 1,059,669 in Seoul Semiconductor Co on September 12, 2024 and sell it today you would lose (346,669) from holding Seoul Semiconductor Co or give up 32.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreamus Company vs. Seoul Semiconductor Co
Performance |
| Timeline |
| Dreamus Company |
| Seoul Semiconductor |
Dreamus and Seoul Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreamus and Seoul Semiconductor
The main advantage of trading using opposite Dreamus and Seoul Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreamus position performs unexpectedly, Seoul Semiconductor 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 Seoul Semiconductor will offset losses from the drop in Seoul Semiconductor's long position.| Dreamus vs. Daou Data Corp | Dreamus vs. Solution Advanced Technology | Dreamus vs. Busan Industrial Co | Dreamus vs. Busan Ind |
| Seoul Semiconductor vs. Cube Entertainment | Seoul Semiconductor vs. Dreamus Company | Seoul Semiconductor vs. LG Energy Solution | Seoul Semiconductor vs. Dongwon System |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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