Correlation Between Dream Security and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Dream Security and BGF Retail 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 BGF Retail 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 BGF Retail Co, you can compare the effects of market volatilities on Dream Security and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and BGF Retail.
Diversification Opportunities for Dream Security and BGF Retail
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dream and BGF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Dream Security i.e., Dream Security and BGF Retail go up and down completely randomly.
Pair Corralation between Dream Security and BGF Retail
Assuming the 90 days trading horizon Dream Security co is expected to generate 1.16 times more return on investment than BGF Retail. However, Dream Security is 1.16 times more volatile than BGF Retail Co. It trades about -0.01 of its potential returns per unit of risk. BGF Retail Co is currently generating about -0.08 per unit of risk. If you would invest 330,000 in Dream Security co on August 29, 2024 and sell it today you would lose (4,500) from holding Dream Security co or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. BGF Retail Co
Performance |
| Timeline |
| Dream Security co |
| BGF Retail |
Dream Security and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and BGF Retail
The main advantage of trading using opposite Dream Security and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.The idea behind Dream Security co and BGF Retail Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BGF Retail vs. AptaBio Therapeutics | BGF Retail vs. Daewoo SBI SPAC | BGF Retail vs. Dream Security co | BGF Retail 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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