Correlation Between SAMG Entertainment and Doosan Fuel
Can any of the company-specific risk be diversified away by investing in both SAMG Entertainment and Doosan Fuel 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 Doosan Fuel 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 Doosan Fuel Cell, you can compare the effects of market volatilities on SAMG Entertainment and Doosan Fuel 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 Doosan Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMG Entertainment and Doosan Fuel.
Diversification Opportunities for SAMG Entertainment and Doosan Fuel
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAMG and Doosan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and Doosan Fuel Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Fuel Cell 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 Doosan Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Fuel Cell has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and Doosan Fuel go up and down completely randomly.
Pair Corralation between SAMG Entertainment and Doosan Fuel
Assuming the 90 days trading horizon SAMG Entertainment Co is expected to generate 0.88 times more return on investment than Doosan Fuel. However, SAMG Entertainment Co is 1.14 times less risky than Doosan Fuel. It trades about 0.25 of its potential returns per unit of risk. Doosan Fuel Cell is currently generating about 0.12 per unit of risk. If you would invest 1,117,000 in SAMG Entertainment Co on September 13, 2024 and sell it today you would earn a total of 264,000 from holding SAMG Entertainment Co or generate 23.63% 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. Doosan Fuel Cell
Performance |
| Timeline |
| SAMG Entertainment |
| Doosan Fuel Cell |
SAMG Entertainment and Doosan Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAMG Entertainment and Doosan Fuel
The main advantage of trading using opposite SAMG Entertainment and Doosan Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMG Entertainment position performs unexpectedly, Doosan Fuel 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 Doosan Fuel will offset losses from the drop in Doosan Fuel'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 |
| Doosan Fuel vs. ABCO Electronics Co | Doosan Fuel vs. UJU Electronics Co | Doosan Fuel vs. Sungwoo Electronics Co | Doosan Fuel vs. Wireless Power Amplifier |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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