Correlation Between SMC Entertainment and Eat Well
Can any of the company-specific risk be diversified away by investing in both SMC Entertainment and Eat Well 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 Eat Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Entertainment and Eat Well Investment, you can compare the effects of market volatilities on SMC Entertainment and Eat Well 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 Eat Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Entertainment and Eat Well.
Diversification Opportunities for SMC Entertainment and Eat Well
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMC and Eat is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SMC Entertainment and Eat Well Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eat Well Investment 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 Eat Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eat Well Investment has no effect on the direction of SMC Entertainment i.e., SMC Entertainment and Eat Well go up and down completely randomly.
Pair Corralation between SMC Entertainment and Eat Well
Given the investment horizon of 90 days SMC Entertainment is expected to generate 12.39 times less return on investment than Eat Well. But when comparing it to its historical volatility, SMC Entertainment is 12.29 times less risky than Eat Well. It trades about 0.22 of its potential returns per unit of risk. Eat Well Investment is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Eat Well Investment on September 24, 2024 and sell it today you would earn a total of 17.00 from holding Eat Well Investment or generate 566.67% 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. Eat Well Investment
Performance |
| Timeline |
| SMC Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Eat Well Investment |
SMC Entertainment and Eat Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Entertainment and Eat Well
The main advantage of trading using opposite SMC Entertainment and Eat Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Entertainment position performs unexpectedly, Eat Well 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 Eat Well will offset losses from the drop in Eat Well'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 |
| Eat Well vs. Flow Capital Corp | Eat Well vs. Guardian Capital Group | Eat Well vs. Urbana | Eat Well vs. Princeton Capital |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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