Correlation Between Sycamore Entmt and American Funds

Can any of the company-specific risk be diversified away by investing in both Sycamore Entmt and American Funds 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 Sycamore Entmt and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sycamore Entmt Grp and American Funds New, you can compare the effects of market volatilities on Sycamore Entmt and American Funds 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 Sycamore Entmt with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sycamore Entmt and American Funds.

Diversification Opportunities for Sycamore Entmt and American Funds

-0.49

Correlation Coefficient

Sycamore Entmt  American Funds

Very good diversification

The 3 months correlation between Sycamore and American is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sycamore Entmt Grp and American Funds New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds New and Sycamore Entmt 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 Sycamore Entmt Grp are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds New has no effect on the direction of Sycamore Entmt i.e., Sycamore Entmt and American Funds go up and down completely randomly.

Pair Corralation between Sycamore Entmt and American Funds

Given the investment horizon of 90 days Sycamore Entmt Grp is expected to generate 21.11 times more return on investment than American Funds. However, Sycamore Entmt is 21.11 times more volatile than American Funds New. It trades about 0.18 of its potential returns per unit of risk. American Funds New is currently generating about 0.05 per unit of risk. If you would invest  0.06  in Sycamore Entmt Grp on September 12, 2024 and sell it today you would earn a total of  0.11  from holding Sycamore Entmt Grp or generate 183.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Sycamore Entmt Grp  vs.  American Funds New

Sycamore Entmt Grp

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sycamore Entmt Grp are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Sycamore Entmt demonstrated solid returns over the last few months and may actually be approaching a breakup point.

American Funds New

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in American Funds New are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, American Funds is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sycamore Entmt and American Funds

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

The idea behind Sycamore Entmt Grp and American Funds New 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..