Correlation Between SK Holdings and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both SK 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 SK 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 SK Holdings Co and JYP Entertainment, you can compare the effects of market volatilities on SK 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 SK Holdings with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SK Holdings and JYP Entertainment.
Diversification Opportunities for SK Holdings and JYP Entertainment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 034730 and JYP is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SK Holdings Co and JYP Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment and SK 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 SK Holdings Co 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 SK Holdings i.e., SK Holdings and JYP Entertainment go up and down completely randomly.
Pair Corralation between SK Holdings and JYP Entertainment
Assuming the 90 days trading horizon SK Holdings Co is expected to generate 0.69 times more return on investment than JYP Entertainment. However, SK Holdings Co is 1.44 times less risky than JYP Entertainment. It trades about 0.18 of its potential returns per unit of risk. JYP Entertainment is currently generating about 0.12 per unit of risk. If you would invest 13,680,000 in SK Holdings Co on October 20, 2024 and sell it today you would earn a total of 1,000,000 from holding SK Holdings Co or generate 7.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SK Holdings Co vs. JYP Entertainment
Performance |
| Timeline |
| SK Holdings |
| JYP Entertainment |
SK Holdings and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SK Holdings and JYP Entertainment
The main advantage of trading using opposite SK Holdings and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SK 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.| SK Holdings vs. Samsung Life Insurance | SK Holdings vs. Lotte Non Life Insurance | SK Holdings vs. Ssangyong Information Communication | SK Holdings vs. DB Insurance Co |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |