Correlation Between Dream Security and Hanwha Life
Can any of the company-specific risk be diversified away by investing in both Dream Security and Hanwha Life 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 Hanwha Life 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 Hanwha Life Insurance, you can compare the effects of market volatilities on Dream Security and Hanwha Life 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 Hanwha Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Hanwha Life.
Diversification Opportunities for Dream Security and Hanwha Life
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and Hanwha is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Hanwha Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanwha Life Insurance 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 Hanwha Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanwha Life Insurance has no effect on the direction of Dream Security i.e., Dream Security and Hanwha Life go up and down completely randomly.
Pair Corralation between Dream Security and Hanwha Life
Assuming the 90 days trading horizon Dream Security co is expected to generate 1.52 times more return on investment than Hanwha Life. However, Dream Security is 1.52 times more volatile than Hanwha Life Insurance. It trades about 0.03 of its potential returns per unit of risk. Hanwha Life Insurance is currently generating about 0.0 per unit of risk. If you would invest 328,000 in Dream Security co on October 12, 2024 and sell it today you would earn a total of 22,500 from holding Dream Security co or generate 6.86% 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. Hanwha Life Insurance
Performance |
| Timeline |
| Dream Security co |
| Hanwha Life Insurance |
Dream Security and Hanwha Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Hanwha Life
The main advantage of trading using opposite Dream Security and Hanwha Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Hanwha Life 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 Hanwha Life will offset losses from the drop in Hanwha Life's long position.| Dream Security vs. DC Media Co | Dream Security vs. Sangsin Energy Display | Dream Security vs. Barunson Entertainment Arts | Dream Security vs. MediaZen |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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