Correlation Between JYP Entertainment and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Seoyon Topmetal 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 Seoyon Topmetal 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 Seoyon Topmetal Co, you can compare the effects of market volatilities on JYP Entertainment and Seoyon Topmetal 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 Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Seoyon Topmetal.
Diversification Opportunities for JYP Entertainment and Seoyon Topmetal
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JYP and Seoyon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal 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 Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between JYP Entertainment and Seoyon Topmetal
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 0.96 times more return on investment than Seoyon Topmetal. However, JYP Entertainment Corp is 1.04 times less risky than Seoyon Topmetal. It trades about 0.41 of its potential returns per unit of risk. Seoyon Topmetal Co is currently generating about -0.12 per unit of risk. If you would invest 5,350,000 in JYP Entertainment Corp on September 13, 2024 and sell it today you would earn a total of 1,770,000 from holding JYP Entertainment Corp or generate 33.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Seoyon Topmetal Co
Performance |
| Timeline |
| JYP Entertainment Corp |
| Seoyon Topmetal |
JYP Entertainment and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Seoyon Topmetal
The main advantage of trading using opposite JYP Entertainment and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal'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 |
| Seoyon Topmetal vs. THiRA UTECH LTD | Seoyon Topmetal vs. Dong A Steel Technology | Seoyon Topmetal vs. SS TECH | Seoyon Topmetal vs. JYP Entertainment Corp |
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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