Correlation Between SAMG Entertainment and Hannong Chemicals
Can any of the company-specific risk be diversified away by investing in both SAMG Entertainment and Hannong Chemicals 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 SAMG Entertainment and Hannong Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAMG Entertainment Co and Hannong Chemicals, you can compare the effects of market volatilities on SAMG Entertainment and Hannong Chemicals 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 SAMG Entertainment with a short position of Hannong Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMG Entertainment and Hannong Chemicals.
Diversification Opportunities for SAMG Entertainment and Hannong Chemicals
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAMG and Hannong is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and Hannong Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannong Chemicals and SAMG 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 SAMG Entertainment Co are associated (or correlated) with Hannong Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannong Chemicals has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and Hannong Chemicals go up and down completely randomly.
Pair Corralation between SAMG Entertainment and Hannong Chemicals
Assuming the 90 days trading horizon SAMG Entertainment Co is expected to generate 1.02 times more return on investment than Hannong Chemicals. However, SAMG Entertainment is 1.02 times more volatile than Hannong Chemicals. It trades about 0.11 of its potential returns per unit of risk. Hannong Chemicals is currently generating about -0.13 per unit of risk. If you would invest 1,296,000 in SAMG Entertainment Co on October 26, 2024 and sell it today you would earn a total of 269,000 from holding SAMG Entertainment Co or generate 20.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SAMG Entertainment Co vs. Hannong Chemicals
Performance |
Timeline |
SAMG Entertainment |
Hannong Chemicals |
SAMG Entertainment and Hannong Chemicals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SAMG Entertainment and Hannong Chemicals
The main advantage of trading using opposite SAMG Entertainment and Hannong Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAMG Entertainment position performs unexpectedly, Hannong Chemicals 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 Hannong Chemicals will offset losses from the drop in Hannong Chemicals' long position.SAMG Entertainment vs. Daiyang Metal Co | SAMG Entertainment vs. Tae Kyung Chemical | SAMG Entertainment vs. JC Chemical Co | SAMG Entertainment vs. PJ Metal Co |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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