Correlation Between DreamCIS and LabGenomics
Can any of the company-specific risk be diversified away by investing in both DreamCIS and LabGenomics 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 DreamCIS and LabGenomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DreamCIS and LabGenomics Co, you can compare the effects of market volatilities on DreamCIS and LabGenomics 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 DreamCIS with a short position of LabGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of DreamCIS and LabGenomics.
Diversification Opportunities for DreamCIS and LabGenomics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DreamCIS and LabGenomics is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding DreamCIS and LabGenomics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LabGenomics and DreamCIS 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 DreamCIS are associated (or correlated) with LabGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LabGenomics has no effect on the direction of DreamCIS i.e., DreamCIS and LabGenomics go up and down completely randomly.
Pair Corralation between DreamCIS and LabGenomics
Assuming the 90 days trading horizon DreamCIS is expected to generate 1.18 times more return on investment than LabGenomics. However, DreamCIS is 1.18 times more volatile than LabGenomics Co. It trades about 0.03 of its potential returns per unit of risk. LabGenomics Co is currently generating about 0.01 per unit of risk. If you would invest 268,750 in DreamCIS on September 2, 2024 and sell it today you would earn a total of 36,250 from holding DreamCIS or generate 13.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DreamCIS vs. LabGenomics Co
Performance |
| Timeline |
| DreamCIS |
| LabGenomics |
DreamCIS and LabGenomics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DreamCIS and LabGenomics
The main advantage of trading using opposite DreamCIS and LabGenomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DreamCIS position performs unexpectedly, LabGenomics 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 LabGenomics will offset losses from the drop in LabGenomics' long position.| DreamCIS vs. KB Financial Group | DreamCIS vs. Busan Industrial Co | DreamCIS vs. Busan Ind | DreamCIS vs. Mirae Asset Daewoo |
| LabGenomics vs. Hana Financial | LabGenomics vs. BNK Financial Group | LabGenomics vs. Orbitech Co | LabGenomics vs. SS TECH |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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