Correlation Between Dream Security and Samick Musical
Can any of the company-specific risk be diversified away by investing in both Dream Security and Samick Musical 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 Samick Musical 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 Samick Musical Instruments, you can compare the effects of market volatilities on Dream Security and Samick Musical 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 Samick Musical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Samick Musical.
Diversification Opportunities for Dream Security and Samick Musical
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dream and Samick is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Samick Musical Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samick Musical Instr 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 Samick Musical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samick Musical Instr has no effect on the direction of Dream Security i.e., Dream Security and Samick Musical go up and down completely randomly.
Pair Corralation between Dream Security and Samick Musical
Assuming the 90 days trading horizon Dream Security co is expected to generate 2.65 times more return on investment than Samick Musical. However, Dream Security is 2.65 times more volatile than Samick Musical Instruments. It trades about 0.01 of its potential returns per unit of risk. Samick Musical Instruments is currently generating about -0.02 per unit of risk. If you would invest 333,000 in Dream Security co on August 27, 2024 and sell it today you would lose (17,500) from holding Dream Security co or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. Samick Musical Instruments
Performance |
| Timeline |
| Dream Security co |
| Samick Musical Instr |
Dream Security and Samick Musical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Samick Musical
The main advantage of trading using opposite Dream Security and Samick Musical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Samick Musical 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 Samick Musical will offset losses from the drop in Samick Musical's long position.| Dream Security vs. VAIV Co | Dream Security vs. FLITTO Inc | Dream Security vs. Innodep | Dream Security vs. WISE iTech Co |
| Samick Musical vs. AptaBio Therapeutics | Samick Musical vs. Daewoo SBI SPAC | Samick Musical vs. Dream Security co | Samick Musical vs. Microfriend |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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