Correlation Between Dear Cashmere and Direct Communication

Can any of the company-specific risk be diversified away by investing in both Dear Cashmere and Direct Communication 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 Dear Cashmere and Direct Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dear Cashmere Holding and Direct Communication Solutions, you can compare the effects of market volatilities on Dear Cashmere and Direct Communication 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 Dear Cashmere with a short position of Direct Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dear Cashmere and Direct Communication.

Diversification Opportunities for Dear Cashmere and Direct Communication

0.0

Correlation Coefficient

Dear Cashmere  Direct Communication

Pay attention - limited upside

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

Pair Corralation between Dear Cashmere and Direct Communication

If you would invest  3.95  in Dear Cashmere Holding on September 11, 2025 and sell it today you would earn a total of  0.42  from holding Dear Cashmere Holding or generate 10.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Dear Cashmere Holding  vs.  Direct Communication Solutions

Dear Cashmere Holding

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Dear Cashmere Holding are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Dear Cashmere reported solid returns over the last few months and may actually be approaching a breakup point.

Direct Communication

Risk-Adjusted Performance

Weakest

Over the last 90 days Direct Communication Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Direct Communication is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Dear Cashmere and Direct Communication

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

The idea behind Dear Cashmere Holding and Direct Communication Solutions 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.