Correlation Between Dream Security and AurosTechnology
Can any of the company-specific risk be diversified away by investing in both Dream Security and AurosTechnology 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 AurosTechnology 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 AurosTechnology, you can compare the effects of market volatilities on Dream Security and AurosTechnology 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 AurosTechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and AurosTechnology.
Diversification Opportunities for Dream Security and AurosTechnology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and AurosTechnology is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and AurosTechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AurosTechnology 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 AurosTechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AurosTechnology has no effect on the direction of Dream Security i.e., Dream Security and AurosTechnology go up and down completely randomly.
Pair Corralation between Dream Security and AurosTechnology
Assuming the 90 days trading horizon Dream Security co is expected to generate 0.87 times more return on investment than AurosTechnology. However, Dream Security co is 1.15 times less risky than AurosTechnology. It trades about -0.06 of its potential returns per unit of risk. AurosTechnology is currently generating about -0.23 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 | 100.0% |
| Values | Daily Returns |
Dream Security co vs. AurosTechnology
Performance |
| Timeline |
| Dream Security co |
| AurosTechnology |
Dream Security and AurosTechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and AurosTechnology
The main advantage of trading using opposite Dream Security and AurosTechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, AurosTechnology 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 AurosTechnology will offset losses from the drop in AurosTechnology'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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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