Correlation Between Dream Impact and First Capital

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

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

Diversification Opportunities for Dream Impact and First Capital

-0.82

Correlation Coefficient

Dream Impact  First Capital

Pay attention - limited upside

The 3 months correlation between Dream and First is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dream Impact Trust and First Capital Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Capital Real and Dream Impact 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 Impact Trust are associated (or correlated) with First Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Capital Real has no effect on the direction of Dream Impact i.e., Dream Impact and First Capital go up and down completely randomly.

Pair Corralation between Dream Impact and First Capital

Assuming the 90 days trading horizon Dream Impact Trust is expected to under-perform the First Capital. In addition to that, Dream Impact is 1.86 times more volatile than First Capital Real. It trades about -0.14 of its total potential returns per unit of risk. First Capital Real is currently generating about 0.27 per unit of volatility. If you would invest  1,605  in First Capital Real on April 21, 2025 and sell it today you would earn a total of  283.00  from holding First Capital Real or generate 17.63% return on investment over 90 days.

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

Dream Impact Trust  vs.  First Capital Real

Dream Impact Trust

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

First Capital Real

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Capital Real are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, First Capital sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dream Impact and First Capital

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

The idea behind Dream Impact Trust and First Capital 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.