Correlation Between JYP Entertainment and Jeju Semiconductor
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Jeju Semiconductor 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 Jeju Semiconductor 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 Jeju Semiconductor Corp, you can compare the effects of market volatilities on JYP Entertainment and Jeju Semiconductor 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 Jeju Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Jeju Semiconductor.
Diversification Opportunities for JYP Entertainment and Jeju Semiconductor
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between JYP and Jeju is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Jeju Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Semiconductor Corp 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 Jeju Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Semiconductor Corp has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Jeju Semiconductor go up and down completely randomly.
Pair Corralation between JYP Entertainment and Jeju Semiconductor
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 3.67 times less return on investment than Jeju Semiconductor. But when comparing it to its historical volatility, JYP Entertainment Corp is 2.67 times less risky than Jeju Semiconductor. It trades about 0.22 of its potential returns per unit of risk. Jeju Semiconductor Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 920,000 in Jeju Semiconductor Corp on November 2, 2024 and sell it today you would earn a total of 400,000 from holding Jeju Semiconductor Corp or generate 43.48% 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. Jeju Semiconductor Corp
Performance |
| Timeline |
| JYP Entertainment Corp |
| Jeju Semiconductor Corp |
JYP Entertainment and Jeju Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Jeju Semiconductor
The main advantage of trading using opposite JYP Entertainment and Jeju Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Jeju Semiconductor 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 Jeju Semiconductor will offset losses from the drop in Jeju Semiconductor'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 |
| Jeju Semiconductor vs. Sungmoon Electronics Co | Jeju Semiconductor vs. Samyoung Electronics Co | Jeju Semiconductor vs. Miwon Chemicals Co | Jeju Semiconductor vs. Hannong Chemicals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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