Correlation Between SAMG Entertainment and Cafe24 Corp
Can any of the company-specific risk be diversified away by investing in both SAMG Entertainment and Cafe24 Corp 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 Cafe24 Corp 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 Cafe24 Corp, you can compare the effects of market volatilities on SAMG Entertainment and Cafe24 Corp 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 Cafe24 Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMG Entertainment and Cafe24 Corp.
Diversification Opportunities for SAMG Entertainment and Cafe24 Corp
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SAMG and Cafe24 is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and Cafe24 Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cafe24 Corp 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 Cafe24 Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cafe24 Corp has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and Cafe24 Corp go up and down completely randomly.
Pair Corralation between SAMG Entertainment and Cafe24 Corp
Assuming the 90 days trading horizon SAMG Entertainment Co is expected to generate 0.75 times more return on investment than Cafe24 Corp. However, SAMG Entertainment Co is 1.33 times less risky than Cafe24 Corp. It trades about 0.28 of its potential returns per unit of risk. Cafe24 Corp is currently generating about 0.17 per unit of risk. If you would invest 1,347,000 in SAMG Entertainment Co on November 5, 2024 and sell it today you would earn a total of 177,000 from holding SAMG Entertainment Co or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAMG Entertainment Co vs. Cafe24 Corp
Performance |
| Timeline |
| SAMG Entertainment |
| Cafe24 Corp |
SAMG Entertainment and Cafe24 Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAMG Entertainment and Cafe24 Corp
The main advantage of trading using opposite SAMG Entertainment and Cafe24 Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMG Entertainment position performs unexpectedly, Cafe24 Corp 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 Cafe24 Corp will offset losses from the drop in Cafe24 Corp's long position.| SAMG Entertainment vs. Digital Power Communications | SAMG Entertainment vs. Organic Special Pet | SAMG Entertainment vs. Cuckoo Homesys Co | SAMG Entertainment vs. Ssangyong Information Communication |
| Cafe24 Corp vs. Samsung Publishing Co | Cafe24 Corp vs. Nh Investment And | Cafe24 Corp vs. Automobile Pc | Cafe24 Corp vs. Lotte Rental 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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