Correlation Between KG Eco and Dreamus
Can any of the company-specific risk be diversified away by investing in both KG Eco 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 KG Eco and Dreamus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KG Eco Technology and Dreamus Company, you can compare the effects of market volatilities on KG Eco 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 KG Eco with a short position of Dreamus. Check out your portfolio center. Please also check ongoing floating volatility patterns of KG Eco and Dreamus.
Diversification Opportunities for KG Eco and Dreamus
Weak diversification
The 3 months correlation between 151860 and Dreamus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding KG Eco Technology and Dreamus Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreamus Company and KG Eco 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 KG Eco Technology 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 KG Eco i.e., KG Eco and Dreamus go up and down completely randomly.
Pair Corralation between KG Eco and Dreamus
Assuming the 90 days trading horizon KG Eco Technology is expected to under-perform the Dreamus. In addition to that, KG Eco is 1.04 times more volatile than Dreamus Company. It trades about -0.02 of its total potential returns per unit of risk. Dreamus Company is currently generating about -0.01 per unit of volatility. If you would invest 287,000 in Dreamus Company on August 25, 2024 and sell it today you would lose (119,500) from holding Dreamus Company or give up 41.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
KG Eco Technology vs. Dreamus Company
Performance |
| Timeline |
| KG Eco Technology |
| Dreamus Company |
KG Eco and Dreamus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KG Eco and Dreamus
The main advantage of trading using opposite KG Eco and Dreamus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KG Eco 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.| KG Eco vs. KB Financial Group | KG Eco vs. Shinhan Financial Group | KG Eco vs. Hana Financial | KG Eco vs. Woori Financial Group |
| Dreamus vs. KG Eco Technology | Dreamus vs. Dong A Steel Technology | Dreamus vs. Chin Yang Chemical | Dreamus vs. Hana Technology 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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