Correlation Between Sack Lunch and SMC Entertainment
Can any of the company-specific risk be diversified away by investing in both Sack Lunch and SMC Entertainment 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 Sack Lunch and SMC Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sack Lunch Productions and SMC Entertainment, you can compare the effects of market volatilities on Sack Lunch and SMC Entertainment 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 Sack Lunch with a short position of SMC Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sack Lunch and SMC Entertainment.
Diversification Opportunities for Sack Lunch and SMC Entertainment
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sack and SMC is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sack Lunch Productions and SMC Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMC Entertainment and Sack Lunch 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 Sack Lunch Productions are associated (or correlated) with SMC Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMC Entertainment has no effect on the direction of Sack Lunch i.e., Sack Lunch and SMC Entertainment go up and down completely randomly.
Pair Corralation between Sack Lunch and SMC Entertainment
Given the investment horizon of 90 days Sack Lunch is expected to generate 8.67 times less return on investment than SMC Entertainment. In addition to that, Sack Lunch is 2.03 times more volatile than SMC Entertainment. It trades about 0.02 of its total potential returns per unit of risk. SMC Entertainment is currently generating about 0.37 per unit of volatility. If you would invest 0.17 in SMC Entertainment on December 1, 2024 and sell it today you would earn a total of 0.17 from holding SMC Entertainment or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sack Lunch Productions vs. SMC Entertainment
Performance |
| Timeline |
| Sack Lunch Productions |
| SMC Entertainment |
Sack Lunch and SMC Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sack Lunch and SMC Entertainment
The main advantage of trading using opposite Sack Lunch and SMC Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sack Lunch position performs unexpectedly, SMC Entertainment 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 SMC Entertainment will offset losses from the drop in SMC Entertainment's long position.| Sack Lunch vs. Aerius International | Sack Lunch vs. Potash America | Sack Lunch vs. Blue Diamond Ventures | Sack Lunch vs. Daniels Corporate Advisory |
| SMC Entertainment vs. Yamaha | SMC Entertainment vs. Paragon Technologies | SMC Entertainment vs. Woodbrook Group Holdings | SMC Entertainment vs. MicroCloud Hologram |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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