Correlation Between SMC Entertainment and One Step
Can any of the company-specific risk be diversified away by investing in both SMC Entertainment and One Step 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 One Step into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Entertainment and One Step Vending, you can compare the effects of market volatilities on SMC Entertainment and One Step 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 One Step. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Entertainment and One Step.
Diversification Opportunities for SMC Entertainment and One Step
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SMC and One is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SMC Entertainment and One Step Vending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Step Vending 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 One Step. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Step Vending has no effect on the direction of SMC Entertainment i.e., SMC Entertainment and One Step go up and down completely randomly.
Pair Corralation between SMC Entertainment and One Step
Given the investment horizon of 90 days SMC Entertainment is expected to generate 0.56 times more return on investment than One Step. However, SMC Entertainment is 1.8 times less risky than One Step. It trades about 0.35 of its potential returns per unit of risk. One Step Vending is currently generating about 0.02 per unit of risk. If you would invest 0.15 in SMC Entertainment on November 29, 2024 and sell it today you would earn a total of 0.15 from holding SMC Entertainment or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SMC Entertainment vs. One Step Vending
Performance |
| Timeline |
| SMC Entertainment |
| One Step Vending |
SMC Entertainment and One Step Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Entertainment and One Step
The main advantage of trading using opposite SMC Entertainment and One Step positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Entertainment position performs unexpectedly, One Step 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 One Step will offset losses from the drop in One Step'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 |
| One Step vs. Patterson Companies | One Step vs. Supernova Energy | One Step vs. AIM Energy | One Step vs. Movie Studio |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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