Correlation Between Solution Advanced and SAMG Entertainment
Can any of the company-specific risk be diversified away by investing in both Solution Advanced 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 Solution Advanced and SAMG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Advanced Technology and SAMG Entertainment Co, you can compare the effects of market volatilities on Solution Advanced 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 Solution Advanced with a short position of SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and SAMG Entertainment.
Diversification Opportunities for Solution Advanced and SAMG Entertainment
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Solution and SAMG is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced 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 Solution Advanced 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 Solution Advanced 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 Solution Advanced i.e., Solution Advanced and SAMG Entertainment go up and down completely randomly.
Pair Corralation between Solution Advanced and SAMG Entertainment
Assuming the 90 days trading horizon Solution Advanced Technology is expected to generate 0.85 times more return on investment than SAMG Entertainment. However, Solution Advanced Technology is 1.18 times less risky than SAMG Entertainment. It trades about -0.04 of its potential returns per unit of risk. SAMG Entertainment Co is currently generating about -0.04 per unit of risk. If you would invest 351,500 in Solution Advanced Technology on October 26, 2024 and sell it today you would lose (201,700) from holding Solution Advanced Technology or give up 57.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. SAMG Entertainment Co
Performance |
| Timeline |
| Solution Advanced |
| SAMG Entertainment |
Solution Advanced and SAMG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and SAMG Entertainment
The main advantage of trading using opposite Solution Advanced and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced 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.| Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. LG Energy Solution | Solution Advanced vs. SK Hynix |
| SAMG Entertainment vs. SK Telecom Co | SAMG Entertainment vs. Daishin Information Communications | SAMG Entertainment vs. Daejung Chemicals Metals | SAMG Entertainment vs. Hanwha Chemical Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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