Correlation Between SK Hynix and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both SK Hynix and JYP Entertainment 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 SK Hynix and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SK Hynix and JYP Entertainment Corp, you can compare the effects of market volatilities on SK Hynix and JYP Entertainment 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 SK Hynix with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Hynix and JYP Entertainment.
Diversification Opportunities for SK Hynix and JYP Entertainment
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 000660 and JYP is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and JYP Entertainment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment Corp and SK Hynix 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 SK Hynix are associated (or correlated) with JYP Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JYP Entertainment Corp has no effect on the direction of SK Hynix i.e., SK Hynix and JYP Entertainment go up and down completely randomly.
Pair Corralation between SK Hynix and JYP Entertainment
Assuming the 90 days trading horizon SK Hynix is expected to generate 1.08 times more return on investment than JYP Entertainment. However, SK Hynix is 1.08 times more volatile than JYP Entertainment Corp. It trades about 0.07 of its potential returns per unit of risk. JYP Entertainment Corp is currently generating about -0.05 per unit of risk. If you would invest 11,462,800 in SK Hynix on August 25, 2024 and sell it today you would earn a total of 6,207,200 from holding SK Hynix or generate 54.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. JYP Entertainment Corp
Performance |
| Timeline |
| SK Hynix |
| JYP Entertainment Corp |
SK Hynix and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Hynix and JYP Entertainment
The main advantage of trading using opposite SK Hynix and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK Hynix position performs unexpectedly, JYP Entertainment 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 JYP Entertainment will offset losses from the drop in JYP Entertainment's long position.| SK Hynix vs. Kaonmedia Co | SK Hynix vs. Jin Air Co | SK Hynix vs. Daewon Media Co | SK Hynix vs. SM Entertainment Co |
| JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. LG Energy Solution | JYP Entertainment vs. SK Hynix |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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