Correlation Between Nongshim and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both Nongshim and YG 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 Nongshim and YG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nongshim and YG Entertainment, you can compare the effects of market volatilities on Nongshim and YG 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 Nongshim with a short position of YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nongshim and YG Entertainment.
Diversification Opportunities for Nongshim and YG Entertainment
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nongshim and 122870 is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nongshim and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment and Nongshim 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 Nongshim are associated (or correlated) with YG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YG Entertainment has no effect on the direction of Nongshim i.e., Nongshim and YG Entertainment go up and down completely randomly.
Pair Corralation between Nongshim and YG Entertainment
Assuming the 90 days trading horizon Nongshim is expected to generate 7.46 times less return on investment than YG Entertainment. In addition to that, Nongshim is 1.12 times more volatile than YG Entertainment. It trades about 0.01 of its total potential returns per unit of risk. YG Entertainment is currently generating about 0.08 per unit of volatility. If you would invest 4,315,000 in YG Entertainment on September 13, 2024 and sell it today you would earn a total of 180,000 from holding YG Entertainment or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nongshim vs. YG Entertainment
Performance |
| Timeline |
| Nongshim |
| YG Entertainment |
Nongshim and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nongshim and YG Entertainment
The main advantage of trading using opposite Nongshim and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nongshim position performs unexpectedly, YG 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 YG Entertainment will offset losses from the drop in YG Entertainment's long position.| Nongshim vs. YG Entertainment | Nongshim vs. Barunson Entertainment Arts | Nongshim vs. TJ media Co | Nongshim vs. Tamul Multimedia Co |
| YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. LG Energy Solution | YG 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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