Correlation Between SMC Entertainment and Bounce Mobile
Can any of the company-specific risk be diversified away by investing in both SMC Entertainment and Bounce Mobile 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 Bounce Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Entertainment and Bounce Mobile Systems, you can compare the effects of market volatilities on SMC Entertainment and Bounce Mobile 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 Bounce Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Entertainment and Bounce Mobile.
Diversification Opportunities for SMC Entertainment and Bounce Mobile
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMC and Bounce is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SMC Entertainment and Bounce Mobile Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bounce Mobile Systems 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 Bounce Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bounce Mobile Systems has no effect on the direction of SMC Entertainment i.e., SMC Entertainment and Bounce Mobile go up and down completely randomly.
Pair Corralation between SMC Entertainment and Bounce Mobile
Given the investment horizon of 90 days SMC Entertainment is expected to generate 1.67 times less return on investment than Bounce Mobile. But when comparing it to its historical volatility, SMC Entertainment is 1.4 times less risky than Bounce Mobile. It trades about 0.07 of its potential returns per unit of risk. Bounce Mobile Systems is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Bounce Mobile Systems on October 24, 2024 and sell it today you would lose (0.90) from holding Bounce Mobile Systems or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.96% |
| Values | Daily Returns |
SMC Entertainment vs. Bounce Mobile Systems
Performance |
| Timeline |
| SMC Entertainment |
| Bounce Mobile Systems |
SMC Entertainment and Bounce Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Entertainment and Bounce Mobile
The main advantage of trading using opposite SMC Entertainment and Bounce Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Entertainment position performs unexpectedly, Bounce Mobile 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 Bounce Mobile will offset losses from the drop in Bounce Mobile'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 |
| Bounce Mobile vs. Limitless Venture | Bounce Mobile vs. Guardian Capital Group | Bounce Mobile vs. Princeton Capital | Bounce Mobile vs. SMC Entertainment |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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