Correlation Between SMC Entertainment and Cardiff Lexington
Can any of the company-specific risk be diversified away by investing in both SMC Entertainment and Cardiff Lexington 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 Cardiff Lexington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Entertainment and Cardiff Lexington Corp, you can compare the effects of market volatilities on SMC Entertainment and Cardiff Lexington 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 Cardiff Lexington. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Entertainment and Cardiff Lexington.
Diversification Opportunities for SMC Entertainment and Cardiff Lexington
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SMC and Cardiff is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding SMC Entertainment and Cardiff Lexington Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Lexington 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 Cardiff Lexington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiff Lexington Corp has no effect on the direction of SMC Entertainment i.e., SMC Entertainment and Cardiff Lexington go up and down completely randomly.
Pair Corralation between SMC Entertainment and Cardiff Lexington
Given the investment horizon of 90 days SMC Entertainment is expected to under-perform the Cardiff Lexington. But the pink sheet apears to be less risky and, when comparing its historical volatility, SMC Entertainment is 3.94 times less risky than Cardiff Lexington. The pink sheet trades about -0.19 of its potential returns per unit of risk. The Cardiff Lexington Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 700.00 in Cardiff Lexington Corp on September 1, 2024 and sell it today you would lose (50.00) from holding Cardiff Lexington Corp or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
SMC Entertainment vs. Cardiff Lexington Corp
Performance |
| Timeline |
| SMC Entertainment |
| Cardiff Lexington Corp |
SMC Entertainment and Cardiff Lexington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Entertainment and Cardiff Lexington
The main advantage of trading using opposite SMC Entertainment and Cardiff Lexington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Entertainment position performs unexpectedly, Cardiff Lexington 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 Cardiff Lexington will offset losses from the drop in Cardiff Lexington'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 |
| Cardiff Lexington vs. SMC Entertainment | Cardiff Lexington vs. 1812 Brewing | Cardiff Lexington vs. SuRo Capital Corp | Cardiff Lexington vs. Elysee Development Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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