Correlation Between Dream Industrial and Pace Metals

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

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

Diversification Opportunities for Dream Industrial and Pace Metals

0.0

Correlation Coefficient

Dream Industrial  Pace Metals

Pay attention - limited upside

The 3 months correlation between Dream and Pace is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dream Industrial Real and Pace Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Metals and Dream Industrial 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 Industrial Real are associated (or correlated) with Pace Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Metals has no effect on the direction of Dream Industrial i.e., Dream Industrial and Pace Metals go up and down completely randomly.

Pair Corralation between Dream Industrial and Pace Metals

If you would invest  1,031  in Dream Industrial Real on April 24, 2025 and sell it today you would earn a total of  149.00  from holding Dream Industrial Real or generate 14.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Dream Industrial Real  vs.  Pace Metals

Dream Industrial Real

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dream Industrial Real are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dream Industrial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pace Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pace Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Pace Metals is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Dream Industrial and Pace Metals

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

The idea behind Dream Industrial Real and Pace Metals 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.