Correlation Between Automobile and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both Automobile 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 Automobile and YG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automobile Pc and YG Entertainment, you can compare the effects of market volatilities on Automobile 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 Automobile with a short position of YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automobile and YG Entertainment.
Diversification Opportunities for Automobile and YG Entertainment
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automobile and 122870 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Automobile Pc and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment and Automobile 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 Automobile Pc 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 Automobile i.e., Automobile and YG Entertainment go up and down completely randomly.
Pair Corralation between Automobile and YG Entertainment
Assuming the 90 days trading horizon Automobile Pc is expected to under-perform the YG Entertainment. In addition to that, Automobile is 1.07 times more volatile than YG Entertainment. It trades about -0.04 of its total potential returns per unit of risk. YG Entertainment is currently generating about 0.01 per unit of volatility. If you would invest 4,920,211 in YG Entertainment on September 24, 2024 and sell it today you would lose (335,211) from holding YG Entertainment or give up 6.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Automobile Pc vs. YG Entertainment
Performance |
| Timeline |
| Automobile Pc |
| YG Entertainment |
Automobile and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automobile and YG Entertainment
The main advantage of trading using opposite Automobile and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automobile 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.| Automobile vs. ECSTELECOM Co | Automobile vs. Dongbang Transport Logistics | Automobile vs. Hanjin Transportation Co | Automobile vs. Heungkuk Metaltech CoLtd |
| YG Entertainment vs. Mobileleader CoLtd | YG Entertainment vs. Automobile Pc | YG Entertainment vs. KCC Engineering Construction | YG Entertainment vs. Nable Communications |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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