Correlation Between POSCO Holdings and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both POSCO Holdings 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 POSCO Holdings and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POSCO Holdings and JYP Entertainment, you can compare the effects of market volatilities on POSCO Holdings 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 POSCO Holdings with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of POSCO Holdings and JYP Entertainment.
Diversification Opportunities for POSCO Holdings and JYP Entertainment
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between POSCO and JYP is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding POSCO Holdings and JYP Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment and POSCO Holdings 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 POSCO Holdings 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 POSCO Holdings i.e., POSCO Holdings and JYP Entertainment go up and down completely randomly.
Pair Corralation between POSCO Holdings and JYP Entertainment
Assuming the 90 days trading horizon POSCO Holdings is expected to generate 1.98 times less return on investment than JYP Entertainment. In addition to that, POSCO Holdings is 1.28 times more volatile than JYP Entertainment. It trades about 0.11 of its total potential returns per unit of risk. JYP Entertainment is currently generating about 0.27 per unit of volatility. If you would invest 7,500,000 in JYP Entertainment on November 28, 2024 and sell it today you would earn a total of 910,000 from holding JYP Entertainment or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
POSCO Holdings vs. JYP Entertainment
Performance |
| Timeline |
| POSCO Holdings |
| JYP Entertainment |
POSCO Holdings and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with POSCO Holdings and JYP Entertainment
The main advantage of trading using opposite POSCO Holdings and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POSCO Holdings 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.| POSCO Holdings vs. Barunson Entertainment Arts | POSCO Holdings vs. MediaZen | POSCO Holdings vs. KTB Investment Securities | POSCO Holdings vs. Digital Multimedia 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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