Correlation Between JYP Entertainment and Sam Yang
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Sam Yang 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 Sam Yang 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 Sam Yang Foods, you can compare the effects of market volatilities on JYP Entertainment and Sam Yang 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 Sam Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Sam Yang.
Diversification Opportunities for JYP Entertainment and Sam Yang
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JYP and Sam is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Sam Yang Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sam Yang Foods 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 Sam Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sam Yang Foods has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Sam Yang go up and down completely randomly.
Pair Corralation between JYP Entertainment and Sam Yang
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 2.2 times less return on investment than Sam Yang. But when comparing it to its historical volatility, JYP Entertainment Corp is 1.74 times less risky than Sam Yang. It trades about 0.27 of its potential returns per unit of risk. Sam Yang Foods is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 68,400,000 in Sam Yang Foods on November 29, 2024 and sell it today you would earn a total of 19,200,000 from holding Sam Yang Foods or generate 28.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Sam Yang Foods
Performance |
| Timeline |
| JYP Entertainment Corp |
| Sam Yang Foods |
JYP Entertainment and Sam Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Sam Yang
The main advantage of trading using opposite JYP Entertainment and Sam Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Sam Yang 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 Sam Yang will offset losses from the drop in Sam Yang's long position.| JYP Entertainment vs. DB Financial Investment | JYP Entertainment vs. Korea Computer | JYP Entertainment vs. Korea Alcohol Industrial | JYP Entertainment vs. DB Insurance Co |
| Sam Yang vs. Nam Hwa Construction | Sam Yang vs. Daewoo Engineering Construction | Sam Yang vs. Sungdo Engineering Construction | Sam Yang vs. Adaptive Plasma Technology |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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