Correlation Between JYP Entertainment and J Steel
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and J Steel 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 J Steel 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 J Steel Co, you can compare the effects of market volatilities on JYP Entertainment and J Steel 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 J Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and J Steel.
Diversification Opportunities for JYP Entertainment and J Steel
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between JYP and 023440 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and J Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on J 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 J Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of J Steel has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and J Steel go up and down completely randomly.
Pair Corralation between JYP Entertainment and J Steel
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 2.45 times less return on investment than J Steel. But when comparing it to its historical volatility, JYP Entertainment Corp is 1.54 times less risky than J Steel. It trades about 0.04 of its potential returns per unit of risk. J Steel Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 116,300 in J Steel Co on October 14, 2024 and sell it today you would earn a total of 46,800 from holding J Steel Co or generate 40.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. J Steel Co
Performance |
| Timeline |
| JYP Entertainment Corp |
| J Steel |
JYP Entertainment and J Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and J Steel
The main advantage of trading using opposite JYP Entertainment and J Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, J Steel 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 J Steel will offset losses from the drop in J Steel's long position.| JYP Entertainment vs. Camus Engineering Construction | JYP Entertainment vs. KCC Engineering Construction | JYP Entertainment vs. Dongbang Ship Machinery | JYP Entertainment vs. Asiana Airlines |
| J Steel vs. Choil Aluminum | J Steel vs. JYP Entertainment Corp | J Steel vs. Daejung Chemicals Metals | J Steel vs. Lotte Chilsung Beverage |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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