Correlation Between SMC Entertainment and Suntex Enterprises
Can any of the company-specific risk be diversified away by investing in both SMC Entertainment and Suntex Enterprises 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 Suntex Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMC Entertainment and Suntex Enterprises, you can compare the effects of market volatilities on SMC Entertainment and Suntex Enterprises 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 Suntex Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMC Entertainment and Suntex Enterprises.
Diversification Opportunities for SMC Entertainment and Suntex Enterprises
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SMC and Suntex is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SMC Entertainment and Suntex Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntex Enterprises 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 Suntex Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntex Enterprises has no effect on the direction of SMC Entertainment i.e., SMC Entertainment and Suntex Enterprises go up and down completely randomly.
Pair Corralation between SMC Entertainment and Suntex Enterprises
Given the investment horizon of 90 days SMC Entertainment is expected to generate 1.85 times less return on investment than Suntex Enterprises. But when comparing it to its historical volatility, SMC Entertainment is 2.41 times less risky than Suntex Enterprises. It trades about 0.16 of its potential returns per unit of risk. Suntex Enterprises is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.16 in Suntex Enterprises on December 8, 2024 and sell it today you would earn a total of 0.03 from holding Suntex Enterprises or generate 18.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SMC Entertainment vs. Suntex Enterprises
Performance |
| Timeline |
| SMC Entertainment |
| Suntex Enterprises |
SMC Entertainment and Suntex Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMC Entertainment and Suntex Enterprises
The main advantage of trading using opposite SMC Entertainment and Suntex Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMC Entertainment position performs unexpectedly, Suntex Enterprises 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 Suntex Enterprises will offset losses from the drop in Suntex Enterprises' 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 |
| Suntex Enterprises vs. Strategic Management and | Suntex Enterprises vs. White Label Liquid | Suntex Enterprises vs. Two Hands Corp | Suntex Enterprises vs. EGF Theramed Health |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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