Correlation Between Daewoo SBI and Dream Security
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI and Dream Security 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 Daewoo SBI and Dream Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and Dream Security co, you can compare the effects of market volatilities on Daewoo SBI and Dream Security 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 Daewoo SBI with a short position of Dream Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Dream Security.
Diversification Opportunities for Daewoo SBI and Dream Security
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daewoo and Dream is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Dream Security co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Security co and Daewoo SBI 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 Daewoo SBI SPAC are associated (or correlated) with Dream Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Security co has no effect on the direction of Daewoo SBI i.e., Daewoo SBI and Dream Security go up and down completely randomly.
Pair Corralation between Daewoo SBI and Dream Security
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Dream Security. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo SBI SPAC is 1.55 times less risky than Dream Security. The stock trades about -0.06 of its potential returns per unit of risk. The Dream Security co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 298,500 in Dream Security co on August 24, 2024 and sell it today you would earn a total of 13,500 from holding Dream Security co or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Dream Security co
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Dream Security co |
Daewoo SBI and Dream Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Dream Security
The main advantage of trading using opposite Daewoo SBI and Dream Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI position performs unexpectedly, Dream Security 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 Dream Security will offset losses from the drop in Dream Security's long position.| Daewoo SBI vs. Duksan Hi Metal | Daewoo SBI vs. Genie Music | Daewoo SBI vs. Insung Information Co | Daewoo SBI vs. Jeong Moon Information |
| Dream Security vs. VAIV Co | Dream Security vs. FLITTO Inc | Dream Security vs. Innodep | Dream Security vs. WISE iTech 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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