Correlation Between SAMG Entertainment and Doosan Fuel

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

Diversification Opportunities for SAMG Entertainment and Doosan Fuel

0.63

Correlation Coefficient

SAMG Entertainment  Doosan Fuel

Poor diversification

The 3 months correlation between SAMG and Doosan is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SAMG Entertainment Co and Doosan Fuel Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doosan Fuel Cell 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 Doosan Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doosan Fuel Cell has no effect on the direction of SAMG Entertainment i.e., SAMG Entertainment and Doosan Fuel go up and down completely randomly.

Pair Corralation between SAMG Entertainment and Doosan Fuel

Assuming the 90 days trading horizon SAMG Entertainment Co is expected to under-perform the Doosan Fuel. In addition to that, SAMG Entertainment is 1.15 times more volatile than Doosan Fuel Cell. It trades about -0.12 of its total potential returns per unit of risk. Doosan Fuel Cell is currently generating about -0.01 per unit of volatility. If you would invest  1,834,000  in Doosan Fuel Cell on September 13, 2024 and sell it today you would lose (115,000) from holding Doosan Fuel Cell or give up 6.27% of portfolio value over 90 days.

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

SAMG Entertainment Co  vs.  Doosan Fuel Cell

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.

Doosan Fuel Cell

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Doosan Fuel Cell has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Doosan Fuel 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 Doosan Fuel

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

The idea behind SAMG Entertainment Co and Doosan Fuel Cell 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.