Correlation Between Dreamus and Haesung DS
Can any of the company-specific risk be diversified away by investing in both Dreamus and Haesung DS 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 Haesung DS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dreamus Company and Haesung DS Co, you can compare the effects of market volatilities on Dreamus and Haesung DS 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 Haesung DS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dreamus and Haesung DS.
Diversification Opportunities for Dreamus and Haesung DS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dreamus and Haesung is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dreamus Company and Haesung DS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung DS 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 Haesung DS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung DS has no effect on the direction of Dreamus i.e., Dreamus and Haesung DS go up and down completely randomly.
Pair Corralation between Dreamus and Haesung DS
Assuming the 90 days trading horizon Dreamus Company is expected to generate 1.62 times more return on investment than Haesung DS. However, Dreamus is 1.62 times more volatile than Haesung DS Co. It trades about -0.01 of its potential returns per unit of risk. Haesung DS Co is currently generating about -0.05 per unit of risk. If you would invest 193,500 in Dreamus Company on September 20, 2024 and sell it today you would lose (19,000) from holding Dreamus Company or give up 9.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Dreamus Company vs. Haesung DS Co
Performance |
| Timeline |
| Dreamus Company |
| Haesung DS |
Dreamus and Haesung DS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dreamus and Haesung DS
The main advantage of trading using opposite Dreamus and Haesung DS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dreamus position performs unexpectedly, Haesung DS 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 Haesung DS will offset losses from the drop in Haesung DS's long position.| Dreamus vs. Daou Data Corp | Dreamus vs. Solution Advanced Technology | Dreamus vs. Busan Industrial Co | Dreamus vs. Busan Ind |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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