Correlation Between Hana Technology and Dreamus
Can any of the company-specific risk be diversified away by investing in both Hana Technology and Dreamus 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 Hana Technology and Dreamus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Technology Co and Dreamus Company, you can compare the effects of market volatilities on Hana Technology and Dreamus 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 Hana Technology with a short position of Dreamus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Technology and Dreamus.
Diversification Opportunities for Hana Technology and Dreamus
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hana and Dreamus is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hana Technology Co and Dreamus Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreamus Company and Hana Technology 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 Hana Technology Co are associated (or correlated) with Dreamus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreamus Company has no effect on the direction of Hana Technology i.e., Hana Technology and Dreamus go up and down completely randomly.
Pair Corralation between Hana Technology and Dreamus
Assuming the 90 days trading horizon Hana Technology Co is expected to under-perform the Dreamus. In addition to that, Hana Technology is 1.07 times more volatile than Dreamus Company. It trades about -0.09 of its total potential returns per unit of risk. Dreamus Company is currently generating about -0.08 per unit of volatility. If you would invest 322,500 in Dreamus Company on August 29, 2024 and sell it today you would lose (161,500) from holding Dreamus Company or give up 50.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Technology Co vs. Dreamus Company
Performance |
| Timeline |
| Hana Technology |
| Dreamus Company |
Hana Technology and Dreamus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Technology and Dreamus
The main advantage of trading using opposite Hana Technology and Dreamus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Technology position performs unexpectedly, Dreamus 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 Dreamus will offset losses from the drop in Dreamus' long position.| Hana Technology vs. CS BEARING CoLtd | Hana Technology vs. DAEMO Engineering Co | Hana Technology vs. Seoam Machinery Industry | Hana Technology vs. Booster Co |
| Dreamus vs. KMH Hitech Co | Dreamus vs. GemVaxKAEL CoLtd | Dreamus vs. Busan Industrial Co | Dreamus vs. Busan Ind |
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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