Correlation Between SAMG Entertainment and Daishin Information

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

Diversification Opportunities for SAMG Entertainment and Daishin Information

0.22

Correlation Coefficient

SAMG Entertainment  Daishin Information

Modest diversification

The 3 months correlation between SAMG and Daishin is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Information 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and Daishin Information go up and down completely randomly.

Pair Corralation between SAMG Entertainment and Daishin Information

Assuming the 90 days trading horizon SAMG Entertainment Co is expected to under-perform the Daishin Information. In addition to that, SAMG Entertainment is 1.73 times more volatile than Daishin Information Communications. It trades about -0.04 of its total potential returns per unit of risk. Daishin Information Communications is currently generating about 0.01 per unit of volatility. If you would invest  113,870  in Daishin Information Communications on October 9, 2024 and sell it today you would lose (7,370) from holding Daishin Information Communications or give up 6.47% of portfolio value over 90 days.

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

SAMG Entertainment Co  vs.  Daishin Information Communicat

SAMG Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAMG Entertainment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Daishin Information

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Daishin Information Communications are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Daishin Information sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SAMG Entertainment and Daishin Information

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

The idea behind SAMG Entertainment Co and Daishin Information Communications 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.