Correlation Between Dream Security and Iljin HySolus
Can any of the company-specific risk be diversified away by investing in both Dream Security and Iljin HySolus 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 Iljin HySolus 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 Iljin HySolus Co, you can compare the effects of market volatilities on Dream Security and Iljin HySolus 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 Iljin HySolus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Iljin HySolus.
Diversification Opportunities for Dream Security and Iljin HySolus
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and Iljin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Iljin HySolus Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin HySolus 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 Iljin HySolus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin HySolus has no effect on the direction of Dream Security i.e., Dream Security and Iljin HySolus go up and down completely randomly.
Pair Corralation between Dream Security and Iljin HySolus
Assuming the 90 days trading horizon Dream Security co is expected to generate 2.98 times more return on investment than Iljin HySolus. However, Dream Security is 2.98 times more volatile than Iljin HySolus Co. It trades about 0.03 of its potential returns per unit of risk. Iljin HySolus Co is currently generating about -0.25 per unit of risk. If you would invest 348,500 in Dream Security co on October 24, 2024 and sell it today you would earn a total of 2,000 from holding Dream Security co or generate 0.57% 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. Iljin HySolus Co
Performance |
| Timeline |
| Dream Security co |
| Iljin HySolus |
Dream Security and Iljin HySolus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Iljin HySolus
The main advantage of trading using opposite Dream Security and Iljin HySolus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Iljin HySolus 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 Iljin HySolus will offset losses from the drop in Iljin HySolus' long position.| Dream Security vs. FNSTech Co | Dream Security vs. Genie Music | Dream Security vs. Narae Nanotech Corp | Dream Security vs. Vitzro Tech 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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