Correlation Between Dream Security and Tokai Carbon
Can any of the company-specific risk be diversified away by investing in both Dream Security and Tokai Carbon 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 Tokai Carbon 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 Tokai Carbon Korea, you can compare the effects of market volatilities on Dream Security and Tokai Carbon 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 Tokai Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Tokai Carbon.
Diversification Opportunities for Dream Security and Tokai Carbon
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dream and Tokai is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Tokai Carbon Korea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokai Carbon Korea 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 Tokai Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokai Carbon Korea has no effect on the direction of Dream Security i.e., Dream Security and Tokai Carbon go up and down completely randomly.
Pair Corralation between Dream Security and Tokai Carbon
Assuming the 90 days trading horizon Dream Security co is expected to generate 1.09 times more return on investment than Tokai Carbon. However, Dream Security is 1.09 times more volatile than Tokai Carbon Korea. It trades about 0.0 of its potential returns per unit of risk. Tokai Carbon Korea is currently generating about -0.29 per unit of risk. If you would invest 318,000 in Dream Security co on August 26, 2024 and sell it today you would lose (2,500) from holding Dream Security co or give up 0.79% 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. Tokai Carbon Korea
Performance |
| Timeline |
| Dream Security co |
| Tokai Carbon Korea |
Dream Security and Tokai Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Tokai Carbon
The main advantage of trading using opposite Dream Security and Tokai Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Tokai Carbon 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 Tokai Carbon will offset losses from the drop in Tokai Carbon's long position.| Dream Security vs. MetaLabs Co | Dream Security vs. Hanjoo Light Metal | Dream Security vs. Hannong Chemicals | Dream Security vs. Youngsin Metal Industrial |
| Tokai Carbon vs. SK Hynix | Tokai Carbon vs. People Technology | Tokai Carbon vs. SIMMTECH Co | Tokai Carbon vs. Haesung DS 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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