Correlation Between J Steel and SAMG Entertainment
Can any of the company-specific risk be diversified away by investing in both J Steel 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 J Steel and SAMG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Steel Co and SAMG Entertainment Co, you can compare the effects of market volatilities on J Steel 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 J Steel with a short position of SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Steel and SAMG Entertainment.
Diversification Opportunities for J Steel and SAMG Entertainment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 023440 and SAMG is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding J Steel Co and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment and J Steel 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 J Steel Co 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 J Steel i.e., J Steel and SAMG Entertainment go up and down completely randomly.
Pair Corralation between J Steel and SAMG Entertainment
Assuming the 90 days trading horizon J Steel Co is expected to under-perform the SAMG Entertainment. In addition to that, J Steel is 1.39 times more volatile than SAMG Entertainment Co. It trades about -0.12 of its total potential returns per unit of risk. SAMG Entertainment Co is currently generating about 0.25 per unit of volatility. If you would invest 1,117,000 in SAMG Entertainment Co on September 13, 2024 and sell it today you would earn a total of 264,000 from holding SAMG Entertainment Co or generate 23.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Steel Co vs. SAMG Entertainment Co
Performance |
| Timeline |
| J Steel |
| SAMG Entertainment |
J Steel and SAMG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Steel and SAMG Entertainment
The main advantage of trading using opposite J Steel and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Steel 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.| J Steel vs. Samsung Electronics Co | J Steel vs. Samsung Electronics Co | J Steel vs. LG Energy Solution | J Steel vs. SK Hynix |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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