Correlation Between SM Entertainment and Duksan Hi
Can any of the company-specific risk be diversified away by investing in both SM Entertainment and Duksan Hi 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 SM Entertainment and Duksan Hi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Entertainment Co and Duksan Hi Metal, you can compare the effects of market volatilities on SM Entertainment and Duksan Hi 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 SM Entertainment with a short position of Duksan Hi. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Entertainment and Duksan Hi.
Diversification Opportunities for SM Entertainment and Duksan Hi
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 041510 and Duksan is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding SM Entertainment Co and Duksan Hi Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duksan Hi Metal and SM Entertainment 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 SM Entertainment Co are associated (or correlated) with Duksan Hi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duksan Hi Metal has no effect on the direction of SM Entertainment i.e., SM Entertainment and Duksan Hi go up and down completely randomly.
Pair Corralation between SM Entertainment and Duksan Hi
Assuming the 90 days trading horizon SM Entertainment Co is expected to generate 1.03 times more return on investment than Duksan Hi. However, SM Entertainment is 1.03 times more volatile than Duksan Hi Metal. It trades about 0.02 of its potential returns per unit of risk. Duksan Hi Metal is currently generating about -0.01 per unit of risk. If you would invest 7,666,858 in SM Entertainment Co on September 3, 2024 and sell it today you would earn a total of 813,142 from holding SM Entertainment Co or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SM Entertainment Co vs. Duksan Hi Metal
Performance |
| Timeline |
| SM Entertainment |
| Duksan Hi Metal |
SM Entertainment and Duksan Hi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Entertainment and Duksan Hi
The main advantage of trading using opposite SM Entertainment and Duksan Hi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Entertainment position performs unexpectedly, Duksan Hi 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 Duksan Hi will offset losses from the drop in Duksan Hi's long position.| SM Entertainment vs. Korea New Network | SM Entertainment vs. ICD Co | SM Entertainment vs. DYPNF CoLtd | SM Entertainment vs. Busan Industrial Co |
| Duksan Hi vs. Dongsin Engineering Construction | Duksan Hi vs. Doosan Fuel Cell | Duksan Hi vs. Daishin Balance 1 | Duksan Hi vs. Total Soft Bank |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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