Correlation Between SM Entertainment and Samhyun
Can any of the company-specific risk be diversified away by investing in both SM Entertainment and Samhyun 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 Samhyun 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 Samhyun, you can compare the effects of market volatilities on SM Entertainment and Samhyun 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 Samhyun. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Entertainment and Samhyun.
Diversification Opportunities for SM Entertainment and Samhyun
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 041510 and Samhyun is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding SM Entertainment Co and Samhyun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhyun 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 Samhyun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhyun has no effect on the direction of SM Entertainment i.e., SM Entertainment and Samhyun go up and down completely randomly.
Pair Corralation between SM Entertainment and Samhyun
Assuming the 90 days trading horizon SM Entertainment Co is expected to generate 0.65 times more return on investment than Samhyun. However, SM Entertainment Co is 1.53 times less risky than Samhyun. It trades about 0.02 of its potential returns per unit of risk. Samhyun is currently generating about -0.05 per unit of risk. If you would invest 7,528,717 in SM Entertainment Co on September 28, 2024 and sell it today you would earn a total of 171,283 from holding SM Entertainment Co or generate 2.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 39.0% |
| Values | Daily Returns |
SM Entertainment Co vs. Samhyun
Performance |
| Timeline |
| SM Entertainment |
| Samhyun |
SM Entertainment and Samhyun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Entertainment and Samhyun
The main advantage of trading using opposite SM Entertainment and Samhyun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Entertainment position performs unexpectedly, Samhyun 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 Samhyun will offset losses from the drop in Samhyun's long position.| SM Entertainment vs. YG Entertainment | SM Entertainment vs. JYP Entertainment | SM Entertainment vs. Cube Entertainment | SM Entertainment vs. FNC Entertainment Co |
| Samhyun vs. Daeduck Electronics Co | Samhyun vs. Anam Electronics Co | Samhyun vs. Sangsin Energy Display | Samhyun vs. Sungmoon Electronics Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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