Correlation Between MediaZen and SM Entertainment
Can any of the company-specific risk be diversified away by investing in both MediaZen 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 MediaZen and SM Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MediaZen and SM Entertainment Co, you can compare the effects of market volatilities on MediaZen 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 MediaZen with a short position of SM Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MediaZen and SM Entertainment.
Diversification Opportunities for MediaZen and SM Entertainment
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MediaZen and 041510 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MediaZen and SM Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Entertainment and MediaZen 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 MediaZen 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 MediaZen i.e., MediaZen and SM Entertainment go up and down completely randomly.
Pair Corralation between MediaZen and SM Entertainment
If you would invest 7,080,000 in SM Entertainment Co on August 30, 2024 and sell it today you would earn a total of 1,570,000 from holding SM Entertainment Co or generate 22.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MediaZen vs. SM Entertainment Co
Performance |
| Timeline |
| MediaZen |
| SM Entertainment |
MediaZen and SM Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MediaZen and SM Entertainment
The main advantage of trading using opposite MediaZen and SM Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MediaZen 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.| MediaZen vs. Samsung Electronics Co | MediaZen vs. Samsung Electronics Co | MediaZen vs. LG Energy Solution | MediaZen vs. SK Hynix |
| SM Entertainment vs. Korea New Network | SM Entertainment vs. Busan Industrial Co | SM Entertainment vs. Busan Ind | SM Entertainment vs. Shinhan WTI Futures |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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