Correlation Between SM Entertainment and Vaxcell Bio
Can any of the company-specific risk be diversified away by investing in both SM Entertainment and Vaxcell Bio 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 Vaxcell Bio 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 Vaxcell Bio Therapeutics Co, you can compare the effects of market volatilities on SM Entertainment and Vaxcell Bio 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 Vaxcell Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Entertainment and Vaxcell Bio.
Diversification Opportunities for SM Entertainment and Vaxcell Bio
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between 041510 and Vaxcell is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SM Entertainment Co and Vaxcell Bio Therapeutics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaxcell Bio Therapeu 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 Vaxcell Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaxcell Bio Therapeu has no effect on the direction of SM Entertainment i.e., SM Entertainment and Vaxcell Bio go up and down completely randomly.
Pair Corralation between SM Entertainment and Vaxcell Bio
Assuming the 90 days trading horizon SM Entertainment Co is expected to generate 1.39 times more return on investment than Vaxcell Bio. However, SM Entertainment is 1.39 times more volatile than Vaxcell Bio Therapeutics Co. It trades about 0.15 of its potential returns per unit of risk. Vaxcell Bio Therapeutics Co is currently generating about 0.09 per unit of risk. If you would invest 7,461,870 in SM Entertainment Co on October 25, 2024 and sell it today you would earn a total of 528,130 from holding SM Entertainment Co or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
SM Entertainment Co vs. Vaxcell Bio Therapeutics Co
Performance |
| Timeline |
| SM Entertainment |
| Vaxcell Bio Therapeu |
SM Entertainment and Vaxcell Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Entertainment and Vaxcell Bio
The main advantage of trading using opposite SM Entertainment and Vaxcell Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Entertainment position performs unexpectedly, Vaxcell Bio 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 Vaxcell Bio will offset losses from the drop in Vaxcell Bio's long position.| SM Entertainment vs. YG Entertainment | SM Entertainment vs. JYP Entertainment | SM Entertainment vs. Cube Entertainment | SM Entertainment vs. FNC Entertainment Co |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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