Correlation Between SAMG Entertainment and Daewon Media
Can any of the company-specific risk be diversified away by investing in both SAMG Entertainment and Daewon Media 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 Daewon Media 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 Daewon Media Co, you can compare the effects of market volatilities on SAMG Entertainment and Daewon Media 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 Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMG Entertainment and Daewon Media.
Diversification Opportunities for SAMG Entertainment and Daewon Media
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAMG and Daewon is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media 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 Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and Daewon Media go up and down completely randomly.
Pair Corralation between SAMG Entertainment and Daewon Media
Assuming the 90 days trading horizon SAMG Entertainment Co is expected to under-perform the Daewon Media. In addition to that, SAMG Entertainment is 1.83 times more volatile than Daewon Media Co. It trades about -0.05 of its total potential returns per unit of risk. Daewon Media Co is currently generating about -0.06 per unit of volatility. If you would invest 1,670,828 in Daewon Media Co on September 19, 2024 and sell it today you would lose (882,828) from holding Daewon Media Co or give up 52.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAMG Entertainment Co vs. Daewon Media Co
Performance |
| Timeline |
| SAMG Entertainment |
| Daewon Media |
SAMG Entertainment and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAMG Entertainment and Daewon Media
The main advantage of trading using opposite SAMG Entertainment and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMG Entertainment position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media'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 |
| Daewon Media vs. Eugene Investment Securities | Daewon Media vs. DSC Investment | Daewon Media vs. Shinsegae Information Communication | Daewon Media vs. Daishin Information Communications |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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