Correlation Between SM Entertainment and Dongil Metal
Can any of the company-specific risk be diversified away by investing in both SM Entertainment and Dongil Metal 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 Dongil Metal 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 Dongil Metal Co, you can compare the effects of market volatilities on SM Entertainment and Dongil Metal 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 Dongil Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Entertainment and Dongil Metal.
Diversification Opportunities for SM Entertainment and Dongil Metal
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between 041510 and Dongil is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SM Entertainment Co and Dongil Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongil 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 Dongil Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongil Metal has no effect on the direction of SM Entertainment i.e., SM Entertainment and Dongil Metal go up and down completely randomly.
Pair Corralation between SM Entertainment and Dongil Metal
Assuming the 90 days trading horizon SM Entertainment Co is expected to generate 0.83 times more return on investment than Dongil Metal. However, SM Entertainment Co is 1.2 times less risky than Dongil Metal. It trades about 0.54 of its potential returns per unit of risk. Dongil Metal Co is currently generating about 0.02 per unit of risk. If you would invest 7,040,000 in SM Entertainment Co on November 7, 2024 and sell it today you would earn a total of 1,640,000 from holding SM Entertainment Co or generate 23.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SM Entertainment Co vs. Dongil Metal Co
Performance |
| Timeline |
| SM Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Dongil Metal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SM Entertainment and Dongil Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Entertainment and Dongil Metal
The main advantage of trading using opposite SM Entertainment and Dongil Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Entertainment position performs unexpectedly, Dongil Metal 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 Dongil Metal will offset losses from the drop in Dongil Metal's long position.| SM Entertainment vs. YG Entertainment | SM Entertainment vs. JYP Entertainment | SM Entertainment vs. Cube Entertainment | SM Entertainment vs. FNC Entertainment Co |
| Dongil Metal vs. Tamul Multimedia Co | Dongil Metal vs. T3 Entertainment Co | Dongil Metal vs. Shinhan Financial Group | Dongil Metal vs. Korea Information Communications |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Transaction History View history of all your transactions and understand their impact on performance |