Correlation Between TR Biofab and SAMG Entertainment

Can any of the company-specific risk be diversified away by investing in both TR Biofab and SAMG Entertainment 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 TR Biofab and SAMG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TR Biofab Co and SAMG Entertainment Co, you can compare the effects of market volatilities on TR Biofab and SAMG Entertainment 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 TR Biofab with a short position of SAMG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of TR Biofab and SAMG Entertainment.

Diversification Opportunities for TR Biofab and SAMG Entertainment

-0.64

Correlation Coefficient

TR Biofab  SAMG Entertainment

Excellent diversification

The 3 months correlation between 246710 and SAMG is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding TR Biofab Co and SAMG Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMG Entertainment and TR Biofab 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 TR Biofab Co are associated (or correlated) with SAMG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMG Entertainment has no effect on the direction of TR Biofab i.e., TR Biofab and SAMG Entertainment go up and down completely randomly.

Pair Corralation between TR Biofab and SAMG Entertainment

Assuming the 90 days trading horizon TR Biofab Co is expected to under-perform the SAMG Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, TR Biofab Co is 1.17 times less risky than SAMG Entertainment. The stock trades about -0.09 of its potential returns per unit of risk. The SAMG Entertainment Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,510,000  in SAMG Entertainment Co on December 2, 2024 and sell it today you would earn a total of  190,000  from holding SAMG Entertainment Co or generate 7.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

TR Biofab Co  vs.  SAMG Entertainment Co

TR Biofab

Risk-Adjusted Performance

Very Weak

Over the last 90 days TR Biofab Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

SAMG Entertainment

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SAMG Entertainment Co are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SAMG Entertainment sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TR Biofab and SAMG Entertainment

The main advantage of trading using opposite TR Biofab and SAMG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TR Biofab position performs unexpectedly, SAMG Entertainment 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 SAMG Entertainment will offset losses from the drop in SAMG Entertainment's long position.

The idea behind TR Biofab Co and SAMG Entertainment Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.