Correlation Between SAMG Entertainment and Nuintek CoLtd

Can any of the company-specific risk be diversified away by investing in both SAMG Entertainment and Nuintek CoLtd 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 Nuintek CoLtd 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 Nuintek CoLtd, you can compare the effects of market volatilities on SAMG Entertainment and Nuintek CoLtd 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 Nuintek CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAMG Entertainment and Nuintek CoLtd.

Diversification Opportunities for SAMG Entertainment and Nuintek CoLtd

-0.13

Correlation Coefficient

SAMG Entertainment  Nuintek CoLtd

Good diversification

The 3 months correlation between SAMG and Nuintek is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and Nuintek CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuintek CoLtd 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 Nuintek CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuintek CoLtd has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and Nuintek CoLtd go up and down completely randomly.

Pair Corralation between SAMG Entertainment and Nuintek CoLtd

Assuming the 90 days trading horizon SAMG Entertainment Co is expected to generate 5.77 times more return on investment than Nuintek CoLtd. However, SAMG Entertainment is 5.77 times more volatile than Nuintek CoLtd. It trades about 0.29 of its potential returns per unit of risk. Nuintek CoLtd is currently generating about 0.02 per unit of risk. If you would invest  1,323,000  in SAMG Entertainment Co on December 24, 2024 and sell it today you would earn a total of  1,812,000  from holding SAMG Entertainment Co or generate 136.96% 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.  Nuintek CoLtd

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 22 (%) 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.

Nuintek CoLtd

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuintek CoLtd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Nuintek CoLtd is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SAMG Entertainment and Nuintek CoLtd

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

The idea behind SAMG Entertainment Co and Nuintek CoLtd 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.