Correlation Between SAMG Entertainment and TR Biofab

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

Diversification Opportunities for SAMG Entertainment and TR Biofab

0.15

Correlation Coefficient

SAMG Entertainment  TR Biofab

Average diversification

The 3 months correlation between SAMG and 246710 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and TR Biofab Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Biofab 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 TR Biofab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Biofab has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and TR Biofab go up and down completely randomly.

Pair Corralation between SAMG Entertainment and TR Biofab

Assuming the 90 days trading horizon SAMG Entertainment Co is expected to under-perform the TR Biofab. In addition to that, SAMG Entertainment is 1.32 times more volatile than TR Biofab Co. It trades about -0.12 of its total potential returns per unit of risk. TR Biofab Co is currently generating about -0.04 per unit of volatility. If you would invest  596,000  in TR Biofab Co on September 13, 2024 and sell it today you would lose (59,000) from holding TR Biofab Co or give up 9.9% of portfolio value over 90 days.

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

SAMG Entertainment Co  vs.  TR Biofab Co

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

TR Biofab

Risk-Adjusted Performance

0 of 100

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 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.

Pair Trading with SAMG Entertainment and TR Biofab

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

The idea behind SAMG Entertainment Co and TR Biofab 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.