Correlation Between Dream Security and Sungwoo Hitech

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

Diversification Opportunities for Dream Security and Sungwoo Hitech

-0.41

Correlation Coefficient

Dream Security  Sungwoo Hitech

Very good diversification

The 3 months correlation between Dream and Sungwoo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dream Security co and Sungwoo Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungwoo Hitech 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 Sungwoo Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungwoo Hitech has no effect on the direction of Dream Security i.e., Dream Security and Sungwoo Hitech go up and down completely randomly.

Pair Corralation between Dream Security and Sungwoo Hitech

Assuming the 90 days trading horizon Dream Security co is expected to under-perform the Sungwoo Hitech. In addition to that, Dream Security is 1.24 times more volatile than Sungwoo Hitech Co. It trades about -0.06 of its total potential returns per unit of risk. Sungwoo Hitech Co is currently generating about 0.13 per unit of volatility. If you would invest  498,000  in Sungwoo Hitech Co on December 25, 2024 and sell it today you would earn a total of  91,000  from holding Sungwoo Hitech Co or generate 18.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.25%
Values	Daily Returns

Dream Security co  vs.  Sungwoo Hitech Co

Dream Security co

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dream Security co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Sungwoo Hitech

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sungwoo Hitech Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sungwoo Hitech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dream Security and Sungwoo Hitech

The main advantage of trading using opposite Dream Security and Sungwoo Hitech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Security position performs unexpectedly, Sungwoo Hitech 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 Sungwoo Hitech will offset losses from the drop in Sungwoo Hitech's long position.

The idea behind Dream Security co and Sungwoo Hitech Co 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..