Correlation Between SMC Entertainment and Flow Capital
Can any of the company-specific risk be diversified away by investing in both SMC Entertainment and Flow Capital 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 SMC Entertainment and Flow Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Entertainment and Flow Capital Corp, you can compare the effects of market volatilities on SMC Entertainment and Flow Capital 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 SMC Entertainment with a short position of Flow Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Entertainment and Flow Capital.
Diversification Opportunities for SMC Entertainment and Flow Capital
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SMC and Flow is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SMC Entertainment and Flow Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flow Capital Corp and SMC 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 SMC Entertainment are associated (or correlated) with Flow Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flow Capital Corp has no effect on the direction of SMC Entertainment i.e., SMC Entertainment and Flow Capital go up and down completely randomly.
Pair Corralation between SMC Entertainment and Flow Capital
Given the investment horizon of 90 days SMC Entertainment is expected to generate 4.12 times more return on investment than Flow Capital. However, SMC Entertainment is 4.12 times more volatile than Flow Capital Corp. It trades about 0.1 of its potential returns per unit of risk. Flow Capital Corp is currently generating about -0.22 per unit of risk. If you would invest 0.16 in SMC Entertainment on November 4, 2024 and sell it today you would earn a total of 0.02 from holding SMC Entertainment or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SMC Entertainment vs. Flow Capital Corp
Performance |
| Timeline |
| SMC Entertainment |
| Flow Capital Corp |
SMC Entertainment and Flow Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Entertainment and Flow Capital
The main advantage of trading using opposite SMC Entertainment and Flow Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Entertainment position performs unexpectedly, Flow Capital 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 Flow Capital will offset losses from the drop in Flow Capital's long position.| SMC Entertainment vs. One Step Vending | SMC Entertainment vs. SNM Gobal Holdings | SMC Entertainment vs. Hiru Corporation | SMC Entertainment vs. Sack Lunch Productions |
| Flow Capital vs. Global Healthcare REIT | Flow Capital vs. Freedom Bank of | Flow Capital vs. Hinto Energy | Flow Capital vs. Ensurge |
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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