Correlation Between Dream Security and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Dream Security and Hanjin Transportation 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 Hanjin Transportation 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 Hanjin Transportation Co, you can compare the effects of market volatilities on Dream Security and Hanjin Transportation 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 Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Hanjin Transportation.
Diversification Opportunities for Dream Security and Hanjin Transportation
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dream and Hanjin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation 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 Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of Dream Security i.e., Dream Security and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Dream Security and Hanjin Transportation
Assuming the 90 days trading horizon Dream Security co is expected to generate 3.68 times more return on investment than Hanjin Transportation. However, Dream Security is 3.68 times more volatile than Hanjin Transportation Co. It trades about 0.05 of its potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.07 per unit of risk. If you would invest 339,000 in Dream Security co on November 6, 2024 and sell it today you would earn a total of 26,000 from holding Dream Security co or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. Hanjin Transportation Co
Performance |
| Timeline |
| Dream Security co |
| Hanjin Transportation |
Dream Security and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Hanjin Transportation
The main advantage of trading using opposite Dream Security and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| Dream Security vs. Songwon Industrial Co | Dream Security vs. Kukil Metal Co | Dream Security vs. Genie Music | Dream Security vs. Daelim Industrial Co |
| Hanjin Transportation vs. Seoul Electronics Telecom | Hanjin Transportation vs. Korea Alcohol Industrial | Hanjin Transportation vs. BGF Retail Co | Hanjin Transportation vs. Aprogen Healthcare Games |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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