Correlation Between Dreamus and HB Technology
Can any of the company-specific risk be diversified away by investing in both Dreamus and HB Technology 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 HB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreamus Company and HB Technology TD, you can compare the effects of market volatilities on Dreamus and HB Technology 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 HB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreamus and HB Technology.
Diversification Opportunities for Dreamus and HB Technology
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dreamus and 078150 is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dreamus Company and HB Technology TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HB Technology TD 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 HB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HB Technology TD has no effect on the direction of Dreamus i.e., Dreamus and HB Technology go up and down completely randomly.
Pair Corralation between Dreamus and HB Technology
Assuming the 90 days trading horizon Dreamus Company is expected to generate 0.78 times more return on investment than HB Technology. However, Dreamus Company is 1.28 times less risky than HB Technology. It trades about -0.14 of its potential returns per unit of risk. HB Technology TD is currently generating about -0.24 per unit of risk. If you would invest 168,700 in Dreamus Company on September 12, 2024 and sell it today you would lose (16,600) from holding Dreamus Company or give up 9.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dreamus Company vs. HB Technology TD
Performance |
| Timeline |
| Dreamus Company |
| HB Technology TD |
Dreamus and HB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreamus and HB Technology
The main advantage of trading using opposite Dreamus and HB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreamus position performs unexpectedly, HB Technology 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 HB Technology will offset losses from the drop in HB Technology's long position.| Dreamus vs. Daou Data Corp | Dreamus vs. Solution Advanced Technology | Dreamus vs. Busan Industrial Co | Dreamus vs. Busan Ind |
| HB Technology vs. Cube Entertainment | HB Technology vs. Dreamus Company | HB Technology vs. LG Energy Solution | HB Technology 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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