Correlation Between JYP Entertainment and Digital Imaging
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Digital Imaging 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 Digital Imaging 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 Digital Imaging Technology, you can compare the effects of market volatilities on JYP Entertainment and Digital Imaging 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 Digital Imaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Digital Imaging.
Diversification Opportunities for JYP Entertainment and Digital Imaging
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JYP and Digital is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Digital Imaging Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Imaging Tech 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 Digital Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Imaging Tech has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Digital Imaging go up and down completely randomly.
Pair Corralation between JYP Entertainment and Digital Imaging
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 6.71 times less return on investment than Digital Imaging. But when comparing it to its historical volatility, JYP Entertainment Corp is 1.66 times less risky than Digital Imaging. It trades about 0.02 of its potential returns per unit of risk. Digital Imaging Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 622,880 in Digital Imaging Technology on November 2, 2024 and sell it today you would earn a total of 1,199,120 from holding Digital Imaging Technology or generate 192.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Digital Imaging Technology
Performance |
| Timeline |
| JYP Entertainment Corp |
| Digital Imaging Tech |
JYP Entertainment and Digital Imaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Digital Imaging
The main advantage of trading using opposite JYP Entertainment and Digital Imaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Digital Imaging 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 Digital Imaging will offset losses from the drop in Digital Imaging's long position.| JYP Entertainment vs. ADTechnology CoLtd | JYP Entertainment vs. Dong A Steel Technology | JYP Entertainment vs. iNtRON Biotechnology | JYP Entertainment vs. Nice Information Telecommunication |
| Digital Imaging vs. Daejung Chemicals Metals | Digital Imaging vs. Sam Yang Foods | Digital Imaging vs. Organic Special Pet | Digital Imaging vs. Daiyang Metal 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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