Correlation Between Dream Unlimited and Real Matters

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

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

Diversification Opportunities for Dream Unlimited and Real Matters

-0.71

Correlation Coefficient

Dream Unlimited  Real Matters

Pay attention - limited upside

The 3 months correlation between Dream and Real is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dream Unlimited Corp and Real Matters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Matters and Dream Unlimited 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 Unlimited Corp are associated (or correlated) with Real Matters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Matters has no effect on the direction of Dream Unlimited i.e., Dream Unlimited and Real Matters go up and down completely randomly.

Pair Corralation between Dream Unlimited and Real Matters

Assuming the 90 days trading horizon Dream Unlimited Corp is expected to generate 0.97 times more return on investment than Real Matters. However, Dream Unlimited Corp is 1.03 times less risky than Real Matters. It trades about 0.19 of its potential returns per unit of risk. Real Matters is currently generating about -0.06 per unit of risk. If you would invest  1,806  in Dream Unlimited Corp on April 22, 2025 and sell it today you would earn a total of  362.00  from holding Dream Unlimited Corp or generate 20.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Dream Unlimited Corp  vs.  Real Matters

Dream Unlimited Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dream Unlimited Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Dream Unlimited displayed solid returns over the last few months and may actually be approaching a breakup point.

Real Matters

Risk-Adjusted Performance

Very Weak

Over the last 90 days Real Matters has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Real Matters is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Dream Unlimited and Real Matters

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

The idea behind Dream Unlimited Corp and Real Matters 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.