Correlation Between Dream Security and SillaJen
Can any of the company-specific risk be diversified away by investing in both Dream Security and SillaJen 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 SillaJen 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 SillaJen, you can compare the effects of market volatilities on Dream Security and SillaJen 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 SillaJen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and SillaJen.
Diversification Opportunities for Dream Security and SillaJen
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and SillaJen is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and SillaJen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SillaJen 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 SillaJen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SillaJen has no effect on the direction of Dream Security i.e., Dream Security and SillaJen go up and down completely randomly.
Pair Corralation between Dream Security and SillaJen
Assuming the 90 days trading horizon Dream Security co is expected to generate 1.24 times more return on investment than SillaJen. However, Dream Security is 1.24 times more volatile than SillaJen. It trades about 0.01 of its potential returns per unit of risk. SillaJen is currently generating about -0.01 per unit of risk. If you would invest 354,000 in Dream Security co on November 29, 2024 and sell it today you would lose (500.00) from holding Dream Security co or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. SillaJen
Performance |
| Timeline |
| Dream Security co |
| SillaJen |
Dream Security and SillaJen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and SillaJen
The main advantage of trading using opposite Dream Security and SillaJen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, SillaJen 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 SillaJen will offset losses from the drop in SillaJen's long position.| Dream Security vs. InnoTherapy | Dream Security vs. Kukil Metal Co | Dream Security vs. Daejung Chemicals Metals | Dream Security vs. Hanjoo Light Metal |
| SillaJen vs. CKH Food Health | SillaJen vs. Hironic Co | SillaJen vs. Keum Kang Steel | SillaJen vs. Dongbang Transport Logistics |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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