Correlation Between Ewon Comfortech and Dreamus
Can any of the company-specific risk be diversified away by investing in both Ewon Comfortech and Dreamus 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 Ewon Comfortech and Dreamus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ewon Comfortech Co and Dreamus Company, you can compare the effects of market volatilities on Ewon Comfortech and Dreamus 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 Ewon Comfortech with a short position of Dreamus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ewon Comfortech and Dreamus.
Diversification Opportunities for Ewon Comfortech and Dreamus
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ewon and Dreamus is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ewon Comfortech Co and Dreamus Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreamus Company and Ewon Comfortech 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 Ewon Comfortech Co are associated (or correlated) with Dreamus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreamus Company has no effect on the direction of Ewon Comfortech i.e., Ewon Comfortech and Dreamus go up and down completely randomly.
Pair Corralation between Ewon Comfortech and Dreamus
Assuming the 90 days trading horizon Ewon Comfortech Co is expected to generate 0.8 times more return on investment than Dreamus. However, Ewon Comfortech Co is 1.25 times less risky than Dreamus. It trades about -0.19 of its potential returns per unit of risk. Dreamus Company is currently generating about -0.4 per unit of risk. If you would invest 113,200 in Ewon Comfortech Co on August 30, 2024 and sell it today you would lose (12,900) from holding Ewon Comfortech Co or give up 11.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ewon Comfortech Co vs. Dreamus Company
Performance |
| Timeline |
| Ewon Comfortech |
| Dreamus Company |
Ewon Comfortech and Dreamus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ewon Comfortech and Dreamus
The main advantage of trading using opposite Ewon Comfortech and Dreamus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ewon Comfortech position performs unexpectedly, Dreamus 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 Dreamus will offset losses from the drop in Dreamus' long position.| Ewon Comfortech vs. KMH Hitech Co | Ewon Comfortech vs. GemVaxKAEL CoLtd | Ewon Comfortech vs. Busan Industrial Co | Ewon Comfortech vs. Busan Ind |
| Dreamus vs. Stic Investments | Dreamus vs. ENERGYMACHINERY KOREA CoLtd | Dreamus vs. Sangsangin Investment Securities | Dreamus vs. SEOJEON ELECTRIC MACHINERY |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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