Correlation Between JYP Entertainment and Dong Il
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Dong Il 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 JYP Entertainment and Dong Il into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment Corp and Dong Il Steel, you can compare the effects of market volatilities on JYP Entertainment and Dong Il 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 JYP Entertainment with a short position of Dong Il. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Dong Il.
Diversification Opportunities for JYP Entertainment and Dong Il
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and Dong is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Dong Il Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong Il Steel and JYP Entertainment 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 JYP Entertainment Corp are associated (or correlated) with Dong Il. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong Il Steel has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Dong Il go up and down completely randomly.
Pair Corralation between JYP Entertainment and Dong Il
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 1.25 times more return on investment than Dong Il. However, JYP Entertainment is 1.25 times more volatile than Dong Il Steel. It trades about 0.04 of its potential returns per unit of risk. Dong Il Steel is currently generating about -0.09 per unit of risk. If you would invest 6,050,000 in JYP Entertainment Corp on August 25, 2024 and sell it today you would earn a total of 560,000 from holding JYP Entertainment Corp or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Dong Il Steel
Performance |
| Timeline |
| JYP Entertainment Corp |
| Dong Il Steel |
JYP Entertainment and Dong Il Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Dong Il
The main advantage of trading using opposite JYP Entertainment and Dong Il positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Dong Il 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 Dong Il will offset losses from the drop in Dong Il's long position.| JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. LG Energy Solution | JYP Entertainment vs. SK Hynix |
| Dong Il vs. Digital Multimedia Technology | Dong Il vs. INNOX Advanced Materials | Dong Il vs. JYP Entertainment Corp | Dong Il vs. Ecoplastic |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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