Correlation Between Dream Security and Kumho Ind
Can any of the company-specific risk be diversified away by investing in both Dream Security and Kumho Ind 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 Kumho Ind 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 Kumho Ind, you can compare the effects of market volatilities on Dream Security and Kumho Ind 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 Kumho Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Kumho Ind.
Diversification Opportunities for Dream Security and Kumho Ind
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and Kumho is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Kumho Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Ind 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 Kumho Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Ind has no effect on the direction of Dream Security i.e., Dream Security and Kumho Ind go up and down completely randomly.
Pair Corralation between Dream Security and Kumho Ind
Assuming the 90 days trading horizon Dream Security co is expected to generate 1.23 times more return on investment than Kumho Ind. However, Dream Security is 1.23 times more volatile than Kumho Ind. It trades about 0.1 of its potential returns per unit of risk. Kumho Ind is currently generating about -0.1 per unit of risk. If you would invest 307,000 in Dream Security co on September 12, 2024 and sell it today you would earn a total of 57,000 from holding Dream Security co or generate 18.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. Kumho Ind
Performance |
| Timeline |
| Dream Security co |
| Kumho Ind |
Dream Security and Kumho Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Kumho Ind
The main advantage of trading using opposite Dream Security and Kumho Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Kumho Ind 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 Kumho Ind will offset losses from the drop in Kumho Ind's long position.| Dream Security vs. Koryo Credit Information | Dream Security vs. Samsung Life Insurance | Dream Security vs. Shinhan Financial Group | Dream Security vs. BIT Computer Co |
| Kumho Ind vs. Fine Besteel Co | Kumho Ind vs. Hankuk Steel Wire | Kumho Ind vs. Koh Young Technology | Kumho Ind vs. HB Technology TD |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |