Correlation Between JYP Entertainment and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and YG Entertainment 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 YG Entertainment 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 YG Entertainment, you can compare the effects of market volatilities on JYP Entertainment and YG Entertainment 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 YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and YG Entertainment.
Diversification Opportunities for JYP Entertainment and YG Entertainment
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JYP and 122870 is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG Entertainment 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 YG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YG Entertainment has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and YG Entertainment go up and down completely randomly.
Pair Corralation between JYP Entertainment and YG Entertainment
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 0.96 times more return on investment than YG Entertainment. However, JYP Entertainment Corp is 1.05 times less risky than YG Entertainment. It trades about 0.02 of its potential returns per unit of risk. YG Entertainment is currently generating about 0.01 per unit of risk. If you would invest 7,277,300 in JYP Entertainment Corp on November 5, 2024 and sell it today you would earn a total of 222,700 from holding JYP Entertainment Corp or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
JYP Entertainment Corp vs. YG Entertainment
Performance |
| Timeline |
| JYP Entertainment Corp |
| YG Entertainment |
JYP Entertainment and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and YG Entertainment
The main advantage of trading using opposite JYP Entertainment and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, YG Entertainment 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 YG Entertainment will offset losses from the drop in YG Entertainment's long position.| JYP Entertainment vs. Daesung Hi Tech Co | JYP Entertainment vs. Shinsegae Food | JYP Entertainment vs. Shinhan Inverse Silver | JYP Entertainment vs. Dongbang Transport Logistics |
| YG Entertainment vs. Kakao Games Corp | YG Entertainment vs. ADTechnology CoLtd | YG Entertainment vs. Global Standard Technology | YG Entertainment vs. DoubleU Games 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |