Correlation Between JYP Entertainment and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Sambo Corrugated 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 Sambo Corrugated 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 Sambo Corrugated Board, you can compare the effects of market volatilities on JYP Entertainment and Sambo Corrugated 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 Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Sambo Corrugated.
Diversification Opportunities for JYP Entertainment and Sambo Corrugated
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and Sambo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board 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 Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Sambo Corrugated go up and down completely randomly.
Pair Corralation between JYP Entertainment and Sambo Corrugated
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 5.15 times more return on investment than Sambo Corrugated. However, JYP Entertainment is 5.15 times more volatile than Sambo Corrugated Board. It trades about 0.16 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.23 per unit of risk. If you would invest 6,830,000 in JYP Entertainment Corp on October 25, 2024 and sell it today you would earn a total of 600,000 from holding JYP Entertainment Corp or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Sambo Corrugated Board
Performance |
| Timeline |
| JYP Entertainment Corp |
| Sambo Corrugated Board |
JYP Entertainment and Sambo Corrugated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Sambo Corrugated
The main advantage of trading using opposite JYP Entertainment and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.| JYP Entertainment vs. Daejoo Electronic Materials | JYP Entertainment vs. KMH Hitech Co | JYP Entertainment vs. KyungIn Electronics Co | JYP Entertainment vs. N2Tech Co |
| Sambo Corrugated vs. KyungIn Electronics Co | Sambo Corrugated vs. Jahwa Electronics Co | Sambo Corrugated vs. DB Financial Investment | Sambo Corrugated vs. Samsung Electronics Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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