Correlation Between Sangsangin Investment and SAMG Entertainment

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Can any of the company-specific risk be diversified away by investing in both Sangsangin Investment and SAMG Entertainment 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 Sangsangin Investment and SAMG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sangsangin Investment Securities and SAMG Entertainment Co, you can compare the effects of market volatilities on Sangsangin Investment and SAMG Entertainment 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 Sangsangin Investment with a short position of SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sangsangin Investment and SAMG Entertainment.

Diversification Opportunities for Sangsangin Investment and SAMG Entertainment

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Sangsangin and SAMG is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sangsangin Investment Securiti and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment and Sangsangin Investment 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 Sangsangin Investment Securities are associated (or correlated) with SAMG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMG Entertainment has no effect on the direction of Sangsangin Investment i.e., Sangsangin Investment and SAMG Entertainment go up and down completely randomly.

Pair Corralation between Sangsangin Investment and SAMG Entertainment

Assuming the 90 days trading horizon Sangsangin Investment Securities is expected to under-perform the SAMG Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Sangsangin Investment Securities is 1.96 times less risky than SAMG Entertainment. The stock trades about -0.08 of its potential returns per unit of risk. The SAMG Entertainment Co is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,010,000  in SAMG Entertainment Co on September 19, 2024 and sell it today you would lose (686,000) from holding SAMG Entertainment Co or give up 34.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Sangsangin Investment Securiti  vs.  SAMG Entertainment Co

 Performance 
       Timeline  
Sangsangin Investment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sangsangin Investment Securities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
SAMG Entertainment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SAMG Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sangsangin Investment and SAMG Entertainment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sangsangin Investment and SAMG Entertainment

The main advantage of trading using opposite Sangsangin Investment and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sangsangin Investment position performs unexpectedly, SAMG Entertainment 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 SAMG Entertainment will offset losses from the drop in SAMG Entertainment's long position.
The idea behind Sangsangin Investment Securities and SAMG Entertainment Co 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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