Correlation Between Dream Security and Shin Heung
Can any of the company-specific risk be diversified away by investing in both Dream Security and Shin Heung 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 Shin Heung 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 Shin Heung Energy, you can compare the effects of market volatilities on Dream Security and Shin Heung 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 Shin Heung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Shin Heung.
Diversification Opportunities for Dream Security and Shin Heung
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and Shin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Shin Heung Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shin Heung Energy 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 Shin Heung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shin Heung Energy has no effect on the direction of Dream Security i.e., Dream Security and Shin Heung go up and down completely randomly.
Pair Corralation between Dream Security and Shin Heung
Assuming the 90 days trading horizon Dream Security co is expected to generate 0.93 times more return on investment than Shin Heung. However, Dream Security co is 1.07 times less risky than Shin Heung. It trades about -0.06 of its potential returns per unit of risk. Shin Heung Energy is currently generating about -0.41 per unit of risk. If you would invest 342,500 in Dream Security co on September 1, 2024 and sell it today you would lose (15,500) from holding Dream Security co or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dream Security co vs. Shin Heung Energy
Performance |
| Timeline |
| Dream Security co |
| Shin Heung Energy |
Dream Security and Shin Heung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Shin Heung
The main advantage of trading using opposite Dream Security and Shin Heung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Shin Heung 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 Shin Heung will offset losses from the drop in Shin Heung's long position.| Dream Security vs. Jeju Beer Co | Dream Security vs. Nh Investment And | Dream Security vs. DB Financial Investment | Dream Security vs. BGF Retail Co |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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