Correlation Between Dream Security and Daewoo Engineering
Can any of the company-specific risk be diversified away by investing in both Dream Security and Daewoo Engineering 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 Daewoo Engineering 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 Daewoo Engineering Construction, you can compare the effects of market volatilities on Dream Security and Daewoo Engineering 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 Daewoo Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Daewoo Engineering.
Diversification Opportunities for Dream Security and Daewoo Engineering
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dream and Daewoo is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Daewoo Engineering Constructio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Engineering 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 Daewoo Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Engineering has no effect on the direction of Dream Security i.e., Dream Security and Daewoo Engineering go up and down completely randomly.
Pair Corralation between Dream Security and Daewoo Engineering
Assuming the 90 days trading horizon Dream Security co is expected to generate 1.27 times more return on investment than Daewoo Engineering. However, Dream Security is 1.27 times more volatile than Daewoo Engineering Construction. It trades about 0.0 of its potential returns per unit of risk. Daewoo Engineering Construction is currently generating about -0.03 per unit of risk. If you would invest 364,500 in Dream Security co on September 4, 2024 and sell it today you would lose (32,000) from holding Dream Security co or give up 8.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. Daewoo Engineering Constructio
Performance |
| Timeline |
| Dream Security co |
| Daewoo Engineering |
Dream Security and Daewoo Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Daewoo Engineering
The main advantage of trading using opposite Dream Security and Daewoo Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Daewoo Engineering 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 Daewoo Engineering will offset losses from the drop in Daewoo Engineering's long position.| Dream Security vs. Kukil Metal Co | Dream Security vs. Kukdong Oil Chemicals | Dream Security vs. Youngsin Metal Industrial | Dream Security vs. LG Chemicals |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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