Correlation Between JYP Entertainment and Shinsegae
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Shinsegae 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 Shinsegae 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 Shinsegae, you can compare the effects of market volatilities on JYP Entertainment and Shinsegae 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 Shinsegae. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Shinsegae.
Diversification Opportunities for JYP Entertainment and Shinsegae
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JYP and Shinsegae is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Shinsegae in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae 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 Shinsegae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Shinsegae go up and down completely randomly.
Pair Corralation between JYP Entertainment and Shinsegae
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 1.73 times more return on investment than Shinsegae. However, JYP Entertainment is 1.73 times more volatile than Shinsegae. It trades about 0.02 of its potential returns per unit of risk. Shinsegae is currently generating about -0.05 per unit of risk. If you would invest 7,237,533 in JYP Entertainment Corp on November 2, 2024 and sell it today you would earn a total of 262,467 from holding JYP Entertainment Corp or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Shinsegae
Performance |
| Timeline |
| JYP Entertainment Corp |
| Shinsegae |
JYP Entertainment and Shinsegae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Shinsegae
The main advantage of trading using opposite JYP Entertainment and Shinsegae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Shinsegae 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 Shinsegae will offset losses from the drop in Shinsegae's long position.| JYP Entertainment vs. ADTechnology CoLtd | JYP Entertainment vs. Dong A Steel Technology | JYP Entertainment vs. iNtRON Biotechnology | JYP Entertainment vs. Nice Information Telecommunication |
| Shinsegae vs. Youngchang Chemical Co | Shinsegae vs. TK Chemical | Shinsegae vs. Kyung In Synthetic Corp | Shinsegae vs. Foodnamoo |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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