Correlation Between CGN Mining and Dream Industrial

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Can any of the company-specific risk be diversified away by investing in both CGN Mining and Dream Industrial 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 CGN Mining and Dream Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGN Mining and Dream Industrial Real, you can compare the effects of market volatilities on CGN Mining and Dream Industrial 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 CGN Mining with a short position of Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGN Mining and Dream Industrial.

Diversification Opportunities for CGN Mining and Dream Industrial

0.33
  Correlation Coefficient

Weak diversification

The 3 months correlation between CGN and Dream is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CGN Mining and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real and CGN Mining 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 CGN Mining are associated (or correlated) with Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of CGN Mining i.e., CGN Mining and Dream Industrial go up and down completely randomly.

Pair Corralation between CGN Mining and Dream Industrial

If you would invest  11.00  in CGN Mining on December 29, 2023 and sell it today you would earn a total of  0.00  from holding CGN Mining or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy4.35%
ValuesDaily Returns

CGN Mining  vs.  Dream Industrial Real

 Performance 
       Timeline  
CGN Mining 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days CGN Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, CGN Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Dream Industrial Real 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Dream Industrial Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CGN Mining and Dream Industrial Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CGN Mining and Dream Industrial

The main advantage of trading using opposite CGN Mining and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGN Mining position performs unexpectedly, Dream Industrial 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 Industrial will offset losses from the drop in Dream Industrial's long position.
The idea behind CGN Mining and Dream Industrial Real 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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