Correlation Between Dream Security and Kolon Plastics
Can any of the company-specific risk be diversified away by investing in both Dream Security and Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics, you can compare the effects of market volatilities on Dream Security and Kolon Plastics 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 Kolon Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Kolon Plastics.
Diversification Opportunities for Dream Security and Kolon Plastics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dream and Kolon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Kolon Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kolon Plastics 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 Kolon Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kolon Plastics has no effect on the direction of Dream Security i.e., Dream Security and Kolon Plastics go up and down completely randomly.
Pair Corralation between Dream Security and Kolon Plastics
Assuming the 90 days trading horizon Dream Security co is expected to generate 1.22 times more return on investment than Kolon Plastics. However, Dream Security is 1.22 times more volatile than Kolon Plastics. It trades about 0.02 of its potential returns per unit of risk. Kolon Plastics is currently generating about -0.03 per unit of risk. If you would invest 327,000 in Dream Security co on October 13, 2024 and sell it today you would earn a total of 19,000 from holding Dream Security co or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. Kolon Plastics
Performance |
| Timeline |
| Dream Security co |
| Kolon Plastics |
Dream Security and Kolon Plastics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Kolon Plastics
The main advantage of trading using opposite Dream Security and Kolon Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Kolon Plastics 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 Kolon Plastics will offset losses from the drop in Kolon Plastics' long position.| Dream Security vs. Mobileleader CoLtd | Dream Security vs. LS Materials | Dream Security vs. Daishin Information Communications | Dream Security vs. Lotte Data Communication |
| Kolon Plastics vs. AptaBio Therapeutics | Kolon Plastics vs. Daewoo SBI SPAC | Kolon Plastics vs. Dream Security co | Kolon Plastics vs. Microfriend |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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