Correlation Between JYP Entertainment and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and KCC Engineering 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 KCC Engineering 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 KCC Engineering Construction, you can compare the effects of market volatilities on JYP Entertainment and KCC Engineering 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 KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and KCC Engineering.
Diversification Opportunities for JYP Entertainment and KCC Engineering
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and KCC is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons 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 KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and KCC Engineering go up and down completely randomly.
Pair Corralation between JYP Entertainment and KCC Engineering
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 4.22 times more return on investment than KCC Engineering. However, JYP Entertainment is 4.22 times more volatile than KCC Engineering Construction. It trades about 0.22 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.26 per unit of risk. If you would invest 6,760,000 in JYP Entertainment Corp on November 2, 2024 and sell it today you would earn a total of 740,000 from holding JYP Entertainment Corp or generate 10.95% 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. KCC Engineering Construction
Performance |
| Timeline |
| JYP Entertainment Corp |
| KCC Engineering Cons |
JYP Entertainment and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and KCC Engineering
The main advantage of trading using opposite JYP Entertainment and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, KCC Engineering 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| JYP Entertainment vs. Shinhan Inverse Copper | JYP Entertainment vs. Samlip General Foods | JYP Entertainment vs. Sempio Foods Co | JYP Entertainment vs. MetaLabs Co |
| KCC Engineering vs. Samsung Electronics Co | KCC Engineering vs. Samsung Electronics Co | KCC Engineering vs. KB Financial Group | KCC Engineering vs. Shinhan Financial Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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