Correlation Between SAMG Entertainment and KTB Investment
Can any of the company-specific risk be diversified away by investing in both SAMG Entertainment and KTB Investment 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 SAMG Entertainment and KTB Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAMG Entertainment Co and KTB Investment Securities, you can compare the effects of market volatilities on SAMG Entertainment and KTB Investment 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 SAMG Entertainment with a short position of KTB Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMG Entertainment and KTB Investment.
Diversification Opportunities for SAMG Entertainment and KTB Investment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAMG and KTB is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and KTB Investment Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KTB Investment Securities and SAMG Entertainment 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 SAMG Entertainment Co are associated (or correlated) with KTB Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KTB Investment Securities has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and KTB Investment go up and down completely randomly.
Pair Corralation between SAMG Entertainment and KTB Investment
Assuming the 90 days trading horizon SAMG Entertainment Co is expected to generate 2.25 times more return on investment than KTB Investment. However, SAMG Entertainment is 2.25 times more volatile than KTB Investment Securities. It trades about 0.12 of its potential returns per unit of risk. KTB Investment Securities is currently generating about 0.12 per unit of risk. If you would invest 1,205,000 in SAMG Entertainment Co on September 19, 2024 and sell it today you would earn a total of 119,000 from holding SAMG Entertainment Co or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAMG Entertainment Co vs. KTB Investment Securities
Performance |
| Timeline |
| SAMG Entertainment |
| KTB Investment Securities |
SAMG Entertainment and KTB Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAMG Entertainment and KTB Investment
The main advantage of trading using opposite SAMG Entertainment and KTB Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMG Entertainment position performs unexpectedly, KTB Investment 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 KTB Investment will offset losses from the drop in KTB Investment's long position.| SAMG Entertainment vs. Samsung Electronics Co | SAMG Entertainment vs. Samsung Electronics Co | SAMG Entertainment vs. LG Energy Solution | SAMG Entertainment vs. SK Hynix |
| KTB Investment vs. Samsung Electronics Co | KTB Investment vs. Samsung Electronics Co | KTB Investment vs. SK Hynix | KTB Investment vs. POSCO Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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