Correlation Between SM Entertainment and Daelim Trading
Can any of the company-specific risk be diversified away by investing in both SM Entertainment and Daelim Trading 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 SM Entertainment and Daelim Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Entertainment Co and Daelim Trading Co, you can compare the effects of market volatilities on SM Entertainment and Daelim Trading 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 SM Entertainment with a short position of Daelim Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Entertainment and Daelim Trading.
Diversification Opportunities for SM Entertainment and Daelim Trading
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 041510 and Daelim is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding SM Entertainment Co and Daelim Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daelim Trading and SM 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 SM Entertainment Co are associated (or correlated) with Daelim Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daelim Trading has no effect on the direction of SM Entertainment i.e., SM Entertainment and Daelim Trading go up and down completely randomly.
Pair Corralation between SM Entertainment and Daelim Trading
Assuming the 90 days trading horizon SM Entertainment Co is expected to generate 1.14 times more return on investment than Daelim Trading. However, SM Entertainment is 1.14 times more volatile than Daelim Trading Co. It trades about 0.18 of its potential returns per unit of risk. Daelim Trading Co is currently generating about -0.05 per unit of risk. If you would invest 5,800,000 in SM Entertainment Co on September 12, 2024 and sell it today you would earn a total of 1,760,000 from holding SM Entertainment Co or generate 30.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SM Entertainment Co vs. Daelim Trading Co
Performance |
Timeline |
SM Entertainment |
Daelim Trading |
SM Entertainment and Daelim Trading Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SM Entertainment and Daelim Trading
The main advantage of trading using opposite SM Entertainment and Daelim Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Entertainment position performs unexpectedly, Daelim Trading 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 Daelim Trading will offset losses from the drop in Daelim Trading's long position.SM Entertainment vs. YG Entertainment | SM Entertainment vs. JYP Entertainment | SM Entertainment vs. Cube Entertainment | SM Entertainment vs. FNC Entertainment Co |
Daelim Trading vs. Samsung Electronics Co | Daelim Trading vs. Samsung Electronics Co | Daelim Trading vs. SK Hynix | Daelim Trading vs. POSCO Holdings |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |