Correlation Between Aprogen Healthcare and SM Entertainment
Can any of the company-specific risk be diversified away by investing in both Aprogen Healthcare 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 Aprogen Healthcare and SM Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aprogen Healthcare Games and SM Entertainment Co, you can compare the effects of market volatilities on Aprogen Healthcare 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 Aprogen Healthcare with a short position of SM Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aprogen Healthcare and SM Entertainment.
Diversification Opportunities for Aprogen Healthcare and SM Entertainment
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aprogen and 041510 is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aprogen Healthcare Games and SM Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Entertainment and Aprogen Healthcare 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 Aprogen Healthcare Games 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 Aprogen Healthcare i.e., Aprogen Healthcare and SM Entertainment go up and down completely randomly.
Pair Corralation between Aprogen Healthcare and SM Entertainment
Assuming the 90 days trading horizon Aprogen Healthcare Games is expected to under-perform the SM Entertainment. In addition to that, Aprogen Healthcare is 1.31 times more volatile than SM Entertainment Co. It trades about -0.04 of its total potential returns per unit of risk. SM Entertainment Co is currently generating about 0.03 per unit of volatility. If you would invest 7,291,903 in SM Entertainment Co on August 28, 2024 and sell it today you would earn a total of 968,097 from holding SM Entertainment Co or generate 13.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.97% |
| Values | Daily Returns |
Aprogen Healthcare Games vs. SM Entertainment Co
Performance |
| Timeline |
| Aprogen Healthcare Games |
| SM Entertainment |
Aprogen Healthcare and SM Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aprogen Healthcare and SM Entertainment
The main advantage of trading using opposite Aprogen Healthcare and SM Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aprogen Healthcare 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.| Aprogen Healthcare vs. Korea Real Estate | Aprogen Healthcare vs. Korea Ratings Co | Aprogen Healthcare vs. IQuest Co | Aprogen Healthcare vs. Wonbang Tech Co |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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