Correlation Between Digital Multimedia and SAMG Entertainment
Can any of the company-specific risk be diversified away by investing in both Digital Multimedia 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 Digital Multimedia and SAMG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital Multimedia Technology and SAMG Entertainment Co, you can compare the effects of market volatilities on Digital Multimedia 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 Digital Multimedia with a short position of SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital Multimedia and SAMG Entertainment.
Diversification Opportunities for Digital Multimedia and SAMG Entertainment
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Digital and SAMG is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Digital Multimedia Technology and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment and Digital Multimedia 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 Digital Multimedia Technology 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 Digital Multimedia i.e., Digital Multimedia and SAMG Entertainment go up and down completely randomly.
Pair Corralation between Digital Multimedia and SAMG Entertainment
Assuming the 90 days trading horizon Digital Multimedia Technology is expected to generate 1.45 times more return on investment than SAMG Entertainment. However, Digital Multimedia is 1.45 times more volatile than SAMG Entertainment Co. It trades about 0.48 of its potential returns per unit of risk. SAMG Entertainment Co is currently generating about 0.12 per unit of risk. If you would invest 151,600 in Digital Multimedia Technology on October 20, 2024 and sell it today you would earn a total of 77,900 from holding Digital Multimedia Technology or generate 51.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digital Multimedia Technology vs. SAMG Entertainment Co
Performance |
| Timeline |
| Digital Multimedia |
| SAMG Entertainment |
Digital Multimedia and SAMG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digital Multimedia and SAMG Entertainment
The main advantage of trading using opposite Digital Multimedia and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital Multimedia 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.| Digital Multimedia vs. AptaBio Therapeutics | Digital Multimedia vs. Daewoo SBI SPAC | Digital Multimedia vs. Dream Security co | Digital Multimedia vs. Microfriend |
| SAMG Entertainment vs. Seoyon Topmetal Co | SAMG Entertainment vs. Kaonmedia Co | SAMG Entertainment vs. Digital Multimedia Technology | SAMG Entertainment vs. Hankook Furniture Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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