Correlation Between Dream Security and Microfriend
Can any of the company-specific risk be diversified away by investing in both Dream Security and Microfriend 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 Microfriend 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 Microfriend, you can compare the effects of market volatilities on Dream Security and Microfriend 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 Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Microfriend.
Diversification Opportunities for Dream Security and Microfriend
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dream and Microfriend is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend 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 Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of Dream Security i.e., Dream Security and Microfriend go up and down completely randomly.
Pair Corralation between Dream Security and Microfriend
Assuming the 90 days trading horizon Dream Security co is expected to generate 0.37 times more return on investment than Microfriend. However, Dream Security co is 2.67 times less risky than Microfriend. It trades about 0.06 of its potential returns per unit of risk. Microfriend is currently generating about 0.01 per unit of risk. If you would invest 301,500 in Dream Security co on August 28, 2024 and sell it today you would earn a total of 22,500 from holding Dream Security co or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. Microfriend
Performance |
| Timeline |
| Dream Security co |
| Microfriend |
Dream Security and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Microfriend
The main advantage of trading using opposite Dream Security and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| Dream Security vs. VAIV Co | Dream Security vs. FLITTO Inc | Dream Security vs. Innodep | Dream Security vs. WISE iTech Co |
| Microfriend vs. SK Hynix | Microfriend vs. People Technology | Microfriend vs. SIMMTECH Co | Microfriend 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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