Correlation Between HR Real and Dream Impact

Can any of the company-specific risk be diversified away by investing in both HR Real and Dream Impact 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 HR Real and Dream Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HR Real Estate and Dream Impact Trust, you can compare the effects of market volatilities on HR Real and Dream Impact 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 HR Real with a short position of Dream Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of HR Real and Dream Impact.

Diversification Opportunities for HR Real and Dream Impact

0.05

Correlation Coefficient

HR Real  Dream Impact

Significant diversification

The 3 months correlation between HR-UN and Dream is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding HR Real Estate and Dream Impact Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Impact Trust and HR Real 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 HR Real Estate are associated (or correlated) with Dream Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Impact Trust has no effect on the direction of HR Real i.e., HR Real and Dream Impact go up and down completely randomly.

Pair Corralation between HR Real and Dream Impact

Assuming the 90 days trading horizon HR Real Estate is expected to generate 0.46 times more return on investment than Dream Impact. However, HR Real Estate is 2.19 times less risky than Dream Impact. It trades about -0.01 of its potential returns per unit of risk. Dream Impact Trust is currently generating about -0.08 per unit of risk. If you would invest  1,075  in HR Real Estate on September 20, 2024 and sell it today you would lose (133.00) from holding HR Real Estate or give up 12.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

HR Real Estate  vs.  Dream Impact Trust

HR Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HR Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Dream Impact Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dream Impact Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with HR Real and Dream Impact

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

The idea behind HR Real Estate and Dream Impact Trust 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.