Correlation Between Dreamus and Ewon Comfortech
Can any of the company-specific risk be diversified away by investing in both Dreamus and Ewon Comfortech 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 Ewon Comfortech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreamus Company and Ewon Comfortech Co, you can compare the effects of market volatilities on Dreamus and Ewon Comfortech 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 Ewon Comfortech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreamus and Ewon Comfortech.
Diversification Opportunities for Dreamus and Ewon Comfortech
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreamus and Ewon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dreamus Company and Ewon Comfortech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ewon Comfortech 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 Ewon Comfortech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ewon Comfortech has no effect on the direction of Dreamus i.e., Dreamus and Ewon Comfortech go up and down completely randomly.
Pair Corralation between Dreamus and Ewon Comfortech
Assuming the 90 days trading horizon Dreamus Company is expected to generate 0.72 times more return on investment than Ewon Comfortech. However, Dreamus Company is 1.4 times less risky than Ewon Comfortech. It trades about -0.03 of its potential returns per unit of risk. Ewon Comfortech Co is currently generating about -0.06 per unit of risk. If you would invest 379,500 in Dreamus Company on November 19, 2024 and sell it today you would lose (200,300) from holding Dreamus Company or give up 52.78% 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. Ewon Comfortech Co
Performance |
| Timeline |
| Dreamus Company |
| Ewon Comfortech |
Dreamus and Ewon Comfortech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreamus and Ewon Comfortech
The main advantage of trading using opposite Dreamus and Ewon Comfortech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreamus position performs unexpectedly, Ewon Comfortech 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 Ewon Comfortech will offset losses from the drop in Ewon Comfortech's long position.| Dreamus vs. BIT Computer Co | Dreamus vs. KCC Engineering Construction | Dreamus vs. Mgame Corp | Dreamus vs. Guyoung Technology Co |
| Ewon Comfortech vs. Hankook Steel Co | Ewon Comfortech vs. BooKook Steel Co | Ewon Comfortech vs. Polaris Office Corp | Ewon Comfortech vs. Hanil Iron Steel |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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