Correlation Between Taegu Broadcasting and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both Taegu Broadcasting 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 Taegu Broadcasting and YG Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taegu Broadcasting and YG Entertainment, you can compare the effects of market volatilities on Taegu Broadcasting 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 Taegu Broadcasting with a short position of YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taegu Broadcasting and YG Entertainment.
Diversification Opportunities for Taegu Broadcasting and YG Entertainment
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Taegu and 122870 is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Taegu Broadcasting and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting i.e., Taegu Broadcasting and YG Entertainment go up and down completely randomly.
Pair Corralation between Taegu Broadcasting and YG Entertainment
Assuming the 90 days trading horizon Taegu Broadcasting is expected to generate 0.66 times more return on investment than YG Entertainment. However, Taegu Broadcasting is 1.51 times less risky than YG Entertainment. It trades about -0.01 of its potential returns per unit of risk. YG Entertainment is currently generating about -0.02 per unit of risk. If you would invest 99,884 in Taegu Broadcasting on September 12, 2024 and sell it today you would lose (8,384) from holding Taegu Broadcasting or give up 8.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taegu Broadcasting vs. YG Entertainment
Performance |
| Timeline |
| Taegu Broadcasting |
| YG Entertainment |
Taegu Broadcasting and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taegu Broadcasting and YG Entertainment
The main advantage of trading using opposite Taegu Broadcasting and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taegu Broadcasting 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.| Taegu Broadcasting vs. YG Entertainment | Taegu Broadcasting vs. JYP Entertainment | Taegu Broadcasting vs. Cube Entertainment | Taegu Broadcasting vs. FNC Entertainment Co |
| YG Entertainment vs. JYP Entertainment | YG Entertainment vs. SM Entertainment Co | YG Entertainment vs. Cube Entertainment | YG Entertainment vs. FNC Entertainment Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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