Correlation Between KIWI Media and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both KIWI Media 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 KIWI Media and YG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIWI Media Group and YG Entertainment, you can compare the effects of market volatilities on KIWI Media 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 KIWI Media with a short position of YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIWI Media and YG Entertainment.
Diversification Opportunities for KIWI Media and YG Entertainment
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KIWI and 122870 is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding KIWI Media Group and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment and KIWI Media 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 KIWI Media Group 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 KIWI Media i.e., KIWI Media and YG Entertainment go up and down completely randomly.
Pair Corralation between KIWI Media and YG Entertainment
Assuming the 90 days trading horizon KIWI Media Group is expected to under-perform the YG Entertainment. In addition to that, KIWI Media is 1.08 times more volatile than YG Entertainment. It trades about -0.12 of its total potential returns per unit of risk. YG Entertainment is currently generating about 0.37 per unit of volatility. If you would invest 3,845,000 in YG Entertainment on August 31, 2024 and sell it today you would earn a total of 930,000 from holding YG Entertainment or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIWI Media Group vs. YG Entertainment
Performance |
| Timeline |
| KIWI Media Group |
| YG Entertainment |
KIWI Media and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIWI Media and YG Entertainment
The main advantage of trading using opposite KIWI Media and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIWI Media 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.| KIWI Media vs. LG Household Healthcare | KIWI Media vs. Display Tech Co | KIWI Media vs. Sempio Foods Co | KIWI Media vs. Iljin Display |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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