Correlation Between SAMG Entertainment and ITM Semiconductor
Can any of the company-specific risk be diversified away by investing in both SAMG Entertainment and ITM Semiconductor 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 ITM Semiconductor 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 ITM Semiconductor Co, you can compare the effects of market volatilities on SAMG Entertainment and ITM Semiconductor 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 ITM Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMG Entertainment and ITM Semiconductor.
Diversification Opportunities for SAMG Entertainment and ITM Semiconductor
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SAMG and ITM is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and ITM Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITM Semiconductor 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 ITM Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITM Semiconductor has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and ITM Semiconductor go up and down completely randomly.
Pair Corralation between SAMG Entertainment and ITM Semiconductor
Assuming the 90 days trading horizon SAMG Entertainment Co is expected to generate 1.45 times more return on investment than ITM Semiconductor. However, SAMG Entertainment is 1.45 times more volatile than ITM Semiconductor Co. It trades about 0.12 of its potential returns per unit of risk. ITM Semiconductor Co is currently generating about -0.13 per unit of risk. If you would invest 1,205,000 in SAMG Entertainment Co on October 19, 2024 and sell it today you would earn a total of 209,000 from holding SAMG Entertainment Co or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAMG Entertainment Co vs. ITM Semiconductor Co
Performance |
| Timeline |
| SAMG Entertainment |
| ITM Semiconductor |
SAMG Entertainment and ITM Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAMG Entertainment and ITM Semiconductor
The main advantage of trading using opposite SAMG Entertainment and ITM Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMG Entertainment position performs unexpectedly, ITM Semiconductor 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 ITM Semiconductor will offset losses from the drop in ITM Semiconductor's long position.| SAMG Entertainment vs. Dongnam Chemical Co | SAMG Entertainment vs. Union Materials Corp | SAMG Entertainment vs. INNOX Advanced Materials | SAMG Entertainment vs. KPX Green Chemical |
| ITM Semiconductor vs. Youngsin Metal Industrial | ITM Semiconductor vs. Duksan Hi Metal | ITM Semiconductor vs. DONGKUK TED METAL | ITM Semiconductor vs. Chorokbaem Healthcare 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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