Correlation Between SM Entertainment and Green Cross
Can any of the company-specific risk be diversified away by investing in both SM Entertainment and Green Cross 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 Green Cross 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 Green Cross Medical, you can compare the effects of market volatilities on SM Entertainment and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Entertainment and Green Cross.
Diversification Opportunities for SM Entertainment and Green Cross
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 041510 and Green is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SM Entertainment Co and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of SM Entertainment i.e., SM Entertainment and Green Cross go up and down completely randomly.
Pair Corralation between SM Entertainment and Green Cross
Assuming the 90 days trading horizon SM Entertainment Co is expected to generate 1.45 times more return on investment than Green Cross. However, SM Entertainment is 1.45 times more volatile than Green Cross Medical. It trades about 0.27 of its potential returns per unit of risk. Green Cross Medical is currently generating about -0.15 per unit of risk. If you would invest 7,010,000 in SM Entertainment Co on August 29, 2024 and sell it today you would earn a total of 1,390,000 from holding SM Entertainment Co or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SM Entertainment Co vs. Green Cross Medical
Performance |
| Timeline |
| SM Entertainment |
| Green Cross Medical |
SM Entertainment and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Entertainment and Green Cross
The main advantage of trading using opposite SM Entertainment and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Entertainment position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| SM Entertainment vs. Korea New Network | SM Entertainment vs. Busan Industrial Co | SM Entertainment vs. Busan Ind | SM Entertainment vs. Shinhan WTI Futures |
| Green Cross vs. Samsung Electronics Co | Green Cross vs. Samsung Electronics Co | Green Cross vs. LG Energy Solution | Green Cross 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |