Correlation Between Dream Security and Solution Advanced
Can any of the company-specific risk be diversified away by investing in both Dream Security and Solution Advanced 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 Solution Advanced 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 Solution Advanced Technology, you can compare the effects of market volatilities on Dream Security and Solution Advanced 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 Solution Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Solution Advanced.
Diversification Opportunities for Dream Security and Solution Advanced
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dream and Solution is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Solution Advanced Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Advanced 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 Solution Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Advanced has no effect on the direction of Dream Security i.e., Dream Security and Solution Advanced go up and down completely randomly.
Pair Corralation between Dream Security and Solution Advanced
Assuming the 90 days trading horizon Dream Security co is expected to under-perform the Solution Advanced. In addition to that, Dream Security is 1.03 times more volatile than Solution Advanced Technology. It trades about -0.1 of its total potential returns per unit of risk. Solution Advanced Technology is currently generating about 0.32 per unit of volatility. If you would invest 130,900 in Solution Advanced Technology on November 3, 2024 and sell it today you would earn a total of 30,700 from holding Solution Advanced Technology or generate 23.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dream Security co vs. Solution Advanced Technology
Performance |
| Timeline |
| Dream Security co |
| Solution Advanced |
Dream Security and Solution Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dream Security and Solution Advanced
The main advantage of trading using opposite Dream Security and Solution Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Solution Advanced 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 Solution Advanced will offset losses from the drop in Solution Advanced's long position.| Dream Security vs. Sangsangin Investment Securities | Dream Security vs. Duksan Hi Metal | Dream Security vs. E Investment Development | Dream Security vs. Daiyang Metal Co |
| Solution Advanced vs. LG Household Healthcare | Solution Advanced vs. Cloud Air CoLtd | Solution Advanced vs. InnoTherapy | Solution Advanced vs. DC Media Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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