Correlation Between ChipsMedia and SAMG Entertainment
Can any of the company-specific risk be diversified away by investing in both ChipsMedia 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 ChipsMedia and SAMG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipsMedia and SAMG Entertainment Co, you can compare the effects of market volatilities on ChipsMedia 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 ChipsMedia with a short position of SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipsMedia and SAMG Entertainment.
Diversification Opportunities for ChipsMedia and SAMG Entertainment
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ChipsMedia and SAMG is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding ChipsMedia and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment and ChipsMedia 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 ChipsMedia 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 ChipsMedia i.e., ChipsMedia and SAMG Entertainment go up and down completely randomly.
Pair Corralation between ChipsMedia and SAMG Entertainment
Assuming the 90 days trading horizon ChipsMedia is expected to generate 39.52 times less return on investment than SAMG Entertainment. But when comparing it to its historical volatility, ChipsMedia is 1.01 times less risky than SAMG Entertainment. It trades about 0.01 of its potential returns per unit of risk. SAMG Entertainment Co is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,117,000 in SAMG Entertainment Co on September 13, 2024 and sell it today you would earn a total of 264,000 from holding SAMG Entertainment Co or generate 23.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipsMedia vs. SAMG Entertainment Co
Performance |
| Timeline |
| ChipsMedia |
| SAMG Entertainment |
ChipsMedia and SAMG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipsMedia and SAMG Entertainment
The main advantage of trading using opposite ChipsMedia and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipsMedia 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.| ChipsMedia vs. Lake Materials Co | ChipsMedia vs. Union Materials Corp | ChipsMedia vs. Ecoplastic | ChipsMedia vs. EV Advanced Material |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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