Correlation Between Dream Security and RFTech
Can any of the company-specific risk be diversified away by investing in both Dream Security and RFTech 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 RFTech 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 RFTech Co, you can compare the effects of market volatilities on Dream Security and RFTech 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 RFTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and RFTech.
Diversification Opportunities for Dream Security and RFTech
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dream and RFTech is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech 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 RFTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFTech has no effect on the direction of Dream Security i.e., Dream Security and RFTech go up and down completely randomly.
Pair Corralation between Dream Security and RFTech
Assuming the 90 days trading horizon Dream Security co is expected to generate 1.65 times more return on investment than RFTech. However, Dream Security is 1.65 times more volatile than RFTech Co. It trades about 0.02 of its potential returns per unit of risk. RFTech Co is currently generating about -0.04 per unit of risk. If you would invest 287,000 in Dream Security co on September 3, 2024 and sell it today you would earn a total of 40,000 from holding Dream Security co or generate 13.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. RFTech Co
Performance |
| Timeline |
| Dream Security co |
| RFTech |
Dream Security and RFTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and RFTech
The main advantage of trading using opposite Dream Security and RFTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, RFTech 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 RFTech will offset losses from the drop in RFTech's long position.| Dream Security vs. VAIV Co | Dream Security vs. FLITTO Inc | Dream Security vs. Innodep | Dream Security vs. WISE iTech Co |
| RFTech vs. Lake Materials Co | RFTech vs. LS Materials | RFTech vs. Hana Materials | RFTech vs. Infinitt Healthcare Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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