Correlation Between JYP Entertainment and Fine Besteel
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Fine Besteel 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 Fine Besteel 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 Fine Besteel Co, you can compare the effects of market volatilities on JYP Entertainment and Fine Besteel 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 Fine Besteel. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Fine Besteel.
Diversification Opportunities for JYP Entertainment and Fine Besteel
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JYP and Fine is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Fine Besteel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fine Besteel 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 Fine Besteel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fine Besteel has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Fine Besteel go up and down completely randomly.
Pair Corralation between JYP Entertainment and Fine Besteel
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to under-perform the Fine Besteel. But the stock apears to be less risky and, when comparing its historical volatility, JYP Entertainment Corp is 1.02 times less risky than Fine Besteel. The stock trades about -0.05 of its potential returns per unit of risk. The Fine Besteel Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 121,500 in Fine Besteel Co on August 25, 2024 and sell it today you would lose (13,300) from holding Fine Besteel Co or give up 10.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Fine Besteel Co
Performance |
| Timeline |
| JYP Entertainment Corp |
| Fine Besteel |
JYP Entertainment and Fine Besteel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Fine Besteel
The main advantage of trading using opposite JYP Entertainment and Fine Besteel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Fine Besteel 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 Fine Besteel will offset losses from the drop in Fine Besteel's long position.| JYP Entertainment vs. Digital Power Communications | JYP Entertainment vs. SK Telecom Co | JYP Entertainment vs. Woorim Machinery Co | JYP Entertainment vs. LG Household Healthcare |
| Fine Besteel vs. AptaBio Therapeutics | Fine Besteel vs. Daewoo SBI SPAC | Fine Besteel vs. Dream Security co | Fine Besteel vs. Microfriend |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| 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 | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |