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, 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
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between 000660 and JYP is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SK Hynix and JYP Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment 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 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 0.94 times more return on investment than JYP Entertainment. However, SK Hynix is 1.07 times less risky than JYP Entertainment. It trades about 0.09 of its potential returns per unit of risk. JYP Entertainment is currently generating about 0.02 per unit of risk. If you would invest 8,301,434 in SK Hynix on November 1, 2024 and sell it today you would earn a total of 13,798,566 from holding SK Hynix or generate 166.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Hynix vs. JYP Entertainment
Performance |
| Timeline |
| SK Hynix |
| JYP Entertainment |
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. ADTechnology CoLtd | SK Hynix vs. FoodNamoo | SK Hynix vs. Orbitech Co | SK Hynix vs. Solution Advanced Technology |
| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
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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