Correlation Between Seoul Food and SAMG Entertainment
Can any of the company-specific risk be diversified away by investing in both Seoul Food 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 Seoul Food and SAMG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seoul Food Industrial and SAMG Entertainment Co, you can compare the effects of market volatilities on Seoul Food 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 Seoul Food with a short position of SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seoul Food and SAMG Entertainment.
Diversification Opportunities for Seoul Food and SAMG Entertainment
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seoul and SAMG is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Seoul Food Industrial and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment and Seoul Food 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 Seoul Food Industrial 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 Seoul Food i.e., Seoul Food and SAMG Entertainment go up and down completely randomly.
Pair Corralation between Seoul Food and SAMG Entertainment
Assuming the 90 days trading horizon Seoul Food Industrial is expected to under-perform the SAMG Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Seoul Food Industrial is 2.8 times less risky than SAMG Entertainment. The stock trades about -0.33 of its potential returns per unit of risk. The SAMG Entertainment Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,347,000 in SAMG Entertainment Co on November 7, 2024 and sell it today you would earn a total of 154,000 from holding SAMG Entertainment Co or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seoul Food Industrial vs. SAMG Entertainment Co
Performance |
| Timeline |
| Seoul Food Industrial |
| SAMG Entertainment |
Seoul Food and SAMG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seoul Food and SAMG Entertainment
The main advantage of trading using opposite Seoul Food and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seoul Food 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.| Seoul Food vs. Aprogen Healthcare Games | Seoul Food vs. Display Tech Co | Seoul Food vs. Grand Korea Leisure | Seoul Food vs. MetaLabs Co |
| SAMG Entertainment vs. Samsung Electronics Co | SAMG Entertainment vs. Samsung Electronics Co | SAMG Entertainment vs. LG Energy Solution | SAMG Entertainment vs. SK Hynix |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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