Correlation Between ECSTELECOM and Dream Security
Can any of the company-specific risk be diversified away by investing in both ECSTELECOM and Dream Security 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 ECSTELECOM and Dream Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECSTELECOM Co and Dream Security co, you can compare the effects of market volatilities on ECSTELECOM and Dream Security 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 ECSTELECOM with a short position of Dream Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECSTELECOM and Dream Security.
Diversification Opportunities for ECSTELECOM and Dream Security
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ECSTELECOM and Dream is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ECSTELECOM Co and Dream Security co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Security co and ECSTELECOM 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 ECSTELECOM Co are associated (or correlated) with Dream Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Security co has no effect on the direction of ECSTELECOM i.e., ECSTELECOM and Dream Security go up and down completely randomly.
Pair Corralation between ECSTELECOM and Dream Security
Assuming the 90 days trading horizon ECSTELECOM Co is expected to generate 0.39 times more return on investment than Dream Security. However, ECSTELECOM Co is 2.54 times less risky than Dream Security. It trades about -0.06 of its potential returns per unit of risk. Dream Security co is currently generating about -0.1 per unit of risk. If you would invest 298,000 in ECSTELECOM Co on November 3, 2024 and sell it today you would lose (6,000) from holding ECSTELECOM Co or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECSTELECOM Co vs. Dream Security co
Performance |
| Timeline |
| ECSTELECOM |
| Dream Security co |
ECSTELECOM and Dream Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECSTELECOM and Dream Security
The main advantage of trading using opposite ECSTELECOM and Dream Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECSTELECOM position performs unexpectedly, Dream Security 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 Dream Security will offset losses from the drop in Dream Security's long position.| ECSTELECOM vs. Daiyang Metal Co | ECSTELECOM vs. Daishin Information Communications | ECSTELECOM vs. Lotte Data Communication | ECSTELECOM vs. Hyunwoo Industrial Co |
| Dream Security vs. Sangsangin Investment Securities | Dream Security vs. Duksan Hi Metal | Dream Security vs. E Investment Development | Dream Security vs. Daiyang Metal Co |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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