Correlation Between Dream Security and Daehan Synthetic

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Can any of the company-specific risk be diversified away by investing in both Dream Security and Daehan Synthetic 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 Daehan Synthetic 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 Daehan Synthetic Fiber, you can compare the effects of market volatilities on Dream Security and Daehan Synthetic 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 Daehan Synthetic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Security and Daehan Synthetic.

Diversification Opportunities for Dream Security and Daehan Synthetic

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Dream and Daehan is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Daehan Synthetic Fiber in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daehan Synthetic Fiber 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 Daehan Synthetic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daehan Synthetic Fiber has no effect on the direction of Dream Security i.e., Dream Security and Daehan Synthetic go up and down completely randomly.

Pair Corralation between Dream Security and Daehan Synthetic

Assuming the 90 days trading horizon Dream Security co is expected to generate 2.99 times more return on investment than Daehan Synthetic. However, Dream Security is 2.99 times more volatile than Daehan Synthetic Fiber. It trades about 0.11 of its potential returns per unit of risk. Daehan Synthetic Fiber is currently generating about 0.08 per unit of risk. If you would invest  305,000  in Dream Security co on September 13, 2024 and sell it today you would earn a total of  59,000  from holding Dream Security co or generate 19.34% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Dream Security co  vs.  Daehan Synthetic Fiber

 Performance 
       Timeline  
Dream Security co 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Dream Security co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dream Security sustained solid returns over the last few months and may actually be approaching a breakup point.
Daehan Synthetic Fiber 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Daehan Synthetic Fiber are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Daehan Synthetic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dream Security and Daehan Synthetic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dream Security and Daehan Synthetic

The main advantage of trading using opposite Dream Security and Daehan Synthetic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Daehan Synthetic 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 Daehan Synthetic will offset losses from the drop in Daehan Synthetic's long position.
The idea behind Dream Security co and Daehan Synthetic Fiber pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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