Correlation Between Kaonmedia and SAMG Entertainment
Can any of the company-specific risk be diversified away by investing in both Kaonmedia and SAMG Entertainment 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 Kaonmedia and SAMG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaonmedia Co and SAMG Entertainment Co, you can compare the effects of market volatilities on Kaonmedia and SAMG Entertainment 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 Kaonmedia with a short position of SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaonmedia and SAMG Entertainment.
Diversification Opportunities for Kaonmedia and SAMG Entertainment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaonmedia and SAMG is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kaonmedia Co and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment and Kaonmedia 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 Kaonmedia Co are associated (or correlated) with SAMG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMG Entertainment has no effect on the direction of Kaonmedia i.e., Kaonmedia and SAMG Entertainment go up and down completely randomly.
Pair Corralation between Kaonmedia and SAMG Entertainment
Assuming the 90 days trading horizon Kaonmedia Co is expected to under-perform the SAMG Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Kaonmedia Co is 2.13 times less risky than SAMG Entertainment. The stock trades about -0.12 of its potential returns per unit of risk. The SAMG Entertainment Co is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 1,322,000 in SAMG Entertainment Co on November 2, 2024 and sell it today you would earn a total of 217,000 from holding SAMG Entertainment Co or generate 16.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaonmedia Co vs. SAMG Entertainment Co
Performance |
| Timeline |
| Kaonmedia |
| SAMG Entertainment |
Kaonmedia and SAMG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaonmedia and SAMG Entertainment
The main advantage of trading using opposite Kaonmedia and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaonmedia position performs unexpectedly, SAMG Entertainment 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 SAMG Entertainment will offset losses from the drop in SAMG Entertainment's long position.| Kaonmedia vs. Samsung Electronics Co | Kaonmedia vs. Samsung Electronics Co | Kaonmedia vs. SK Hynix | Kaonmedia vs. HMM Co |
| SAMG Entertainment vs. Samsung Electronics Co | SAMG Entertainment vs. Samsung Electronics Co | SAMG Entertainment vs. LG Energy Solution | SAMG Entertainment 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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