Correlation Between Nasmedia and SM Entertainment
Can any of the company-specific risk be diversified away by investing in both Nasmedia and SM 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 Nasmedia and SM Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasmedia Co and SM Entertainment Co, you can compare the effects of market volatilities on Nasmedia and SM 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 Nasmedia with a short position of SM Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasmedia and SM Entertainment.
Diversification Opportunities for Nasmedia and SM Entertainment
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nasmedia and 041510 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nasmedia Co and SM Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Entertainment and Nasmedia 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 Nasmedia Co are associated (or correlated) with SM Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Entertainment has no effect on the direction of Nasmedia i.e., Nasmedia and SM Entertainment go up and down completely randomly.
Pair Corralation between Nasmedia and SM Entertainment
Assuming the 90 days trading horizon Nasmedia Co is expected to under-perform the SM Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Nasmedia Co is 1.3 times less risky than SM Entertainment. The stock trades about -0.05 of its potential returns per unit of risk. The SM Entertainment Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 8,584,513 in SM Entertainment Co on August 25, 2024 and sell it today you would lose (564,513) from holding SM Entertainment Co or give up 6.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasmedia Co vs. SM Entertainment Co
Performance |
| Timeline |
| Nasmedia |
| SM Entertainment |
Nasmedia and SM Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasmedia and SM Entertainment
The main advantage of trading using opposite Nasmedia and SM Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasmedia position performs unexpectedly, SM 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 SM Entertainment will offset losses from the drop in SM Entertainment's long position.| Nasmedia vs. Busan Industrial Co | Nasmedia vs. Samlip General Foods | Nasmedia vs. Shinsegae Food | Nasmedia vs. CJ Seafood Corp |
| SM Entertainment vs. AfreecaTV Co | SM Entertainment vs. SS TECH | SM Entertainment vs. Busan Industrial Co | SM Entertainment vs. Busan Ind |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |