Correlation Between PAMT P and Dream Residential

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

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

Diversification Opportunities for PAMT P and Dream Residential

-0.06

Correlation Coefficient

PAMT P  Dream Residential

Good diversification

The 3 months correlation between PAMT and Dream is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding PAMT P and Dream Residential Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Residential Real and PAMT P 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 PAMT P are associated (or correlated) with Dream Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Residential Real has no effect on the direction of PAMT P i.e., PAMT P and Dream Residential go up and down completely randomly.

Pair Corralation between PAMT P and Dream Residential

Given the investment horizon of 90 days PAMT P is expected to generate 1.21 times less return on investment than Dream Residential. In addition to that, PAMT P is 1.79 times more volatile than Dream Residential Real. It trades about 0.03 of its total potential returns per unit of risk. Dream Residential Real is currently generating about 0.07 per unit of volatility. If you would invest  835.00  in Dream Residential Real on March 15, 2025 and sell it today you would earn a total of  80.00  from holding Dream Residential Real or generate 9.58% return on investment over 90 days.

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

PAMT P  vs.  Dream Residential Real

PAMT P

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PAMT P are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady primary indicators, PAMT P may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Dream Residential Real

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dream Residential Real are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Dream Residential may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with PAMT P and Dream Residential

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

The idea behind PAMT P and Dream Residential 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.