Correlation Between SM Culture and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both SM Culture and ITM Semiconductor 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 Culture and ITM Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Culture Contents and ITM Semiconductor Co, you can compare the effects of market volatilities on SM Culture and ITM Semiconductor 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 Culture with a short position of ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Culture and ITM Semiconductor.
Diversification Opportunities for SM Culture and ITM Semiconductor
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 048550 and ITM is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SM Culture Contents and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor and SM Culture 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 Culture Contents are associated (or correlated) with ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of SM Culture i.e., SM Culture and ITM Semiconductor go up and down completely randomly.
Pair Corralation between SM Culture and ITM Semiconductor
Assuming the 90 days trading horizon SM Culture Contents is expected to under-perform the ITM Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, SM Culture Contents is 1.59 times less risky than ITM Semiconductor. The stock trades about -0.1 of its potential returns per unit of risk. The ITM Semiconductor Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,323,000 in ITM Semiconductor Co on October 25, 2024 and sell it today you would lose (45,000) from holding ITM Semiconductor Co or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SM Culture Contents vs. ITM Semiconductor Co
Performance |
| Timeline |
| SM Culture Contents |
| ITM Semiconductor |
SM Culture and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Culture and ITM Semiconductor
The main advantage of trading using opposite SM Culture and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Culture position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| SM Culture vs. Dongkuk Structures Construction | SM Culture vs. Shinhan Inverse Copper | SM Culture vs. Nam Hwa Construction | SM Culture vs. PJ Metal Co |
| ITM Semiconductor vs. SK Hynix | ITM Semiconductor vs. LX Semicon Co | ITM Semiconductor vs. Tokai Carbon Korea | ITM Semiconductor vs. People Technology |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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