Correlation Between Dream Security and Samwha Electronics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Dream Security and Samwha Electronics 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 Samwha Electronics 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 Samwha Electronics Co, you can compare the effects of market volatilities on Dream Security and Samwha Electronics 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 Samwha Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Samwha Electronics.

Diversification Opportunities for Dream Security and Samwha Electronics

-0.55
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Dream and Samwha is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Samwha Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samwha Electronics 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 Samwha Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samwha Electronics has no effect on the direction of Dream Security i.e., Dream Security and Samwha Electronics go up and down completely randomly.

Pair Corralation between Dream Security and Samwha Electronics

Assuming the 90 days trading horizon Dream Security co is expected to under-perform the Samwha Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Dream Security co is 2.29 times less risky than Samwha Electronics. The stock trades about -0.02 of its potential returns per unit of risk. The Samwha Electronics Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  294,000  in Samwha Electronics Co on August 28, 2024 and sell it today you would lose (7,500) from holding Samwha Electronics Co or give up 2.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy95.45%
ValuesDaily Returns

Dream Security co  vs.  Samwha Electronics Co

 Performance 
       Timeline  
Dream Security co 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Dream Security co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dream Security may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Samwha Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Samwha Electronics Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Dream Security and Samwha Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dream Security and Samwha Electronics

The main advantage of trading using opposite Dream Security and Samwha Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Samwha Electronics 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 Samwha Electronics will offset losses from the drop in Samwha Electronics' long position.
The idea behind Dream Security co and Samwha Electronics Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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.

Other Complementary Tools

Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes