Correlation Between Dream Security and SeAH Besteel
Can any of the company-specific risk be diversified away by investing in both Dream Security and SeAH Besteel 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 Dream Security and SeAH Besteel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dream Security co and SeAH Besteel Corp, you can compare the effects of market volatilities on Dream Security and SeAH Besteel 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 Dream Security with a short position of SeAH Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and SeAH Besteel.
Diversification Opportunities for Dream Security and SeAH Besteel
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and SeAH is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and SeAH Besteel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SeAH Besteel Corp and Dream Security 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 Dream Security co are associated (or correlated) with SeAH Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SeAH Besteel Corp has no effect on the direction of Dream Security i.e., Dream Security and SeAH Besteel go up and down completely randomly.
Pair Corralation between Dream Security and SeAH Besteel
Assuming the 90 days trading horizon Dream Security is expected to generate 1.86 times less return on investment than SeAH Besteel. But when comparing it to its historical volatility, Dream Security co is 1.04 times less risky than SeAH Besteel. It trades about 0.02 of its potential returns per unit of risk. SeAH Besteel Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,530,349 in SeAH Besteel Corp on October 26, 2024 and sell it today you would earn a total of 443,651 from holding SeAH Besteel Corp or generate 28.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. SeAH Besteel Corp
Performance |
| Timeline |
| Dream Security co |
| SeAH Besteel Corp |
Dream Security and SeAH Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and SeAH Besteel
The main advantage of trading using opposite Dream Security and SeAH Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, SeAH Besteel 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 SeAH Besteel will offset losses from the drop in SeAH Besteel's long position.| Dream Security vs. Korea Information Engineering | Dream Security vs. Alton Sports CoLtd | Dream Security vs. Lotte Data Communication | Dream Security vs. Sangsin Energy Display |
| SeAH Besteel vs. KB Financial Group | SeAH Besteel vs. Shinhan Financial Group | SeAH Besteel vs. Hana Financial | SeAH Besteel vs. Woori Financial Group |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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