Correlation Between JYP Entertainment and Hana Technology
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Hana Technology 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 Hana Technology 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 Hana Technology Co, you can compare the effects of market volatilities on JYP Entertainment and Hana Technology 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 Hana Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Hana Technology.
Diversification Opportunities for JYP Entertainment and Hana Technology
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and Hana is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Hana Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hana Technology 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 Hana Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hana Technology has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Hana Technology go up and down completely randomly.
Pair Corralation between JYP Entertainment and Hana Technology
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 0.75 times more return on investment than Hana Technology. However, JYP Entertainment Corp is 1.34 times less risky than Hana Technology. It trades about -0.05 of its potential returns per unit of risk. Hana Technology Co is currently generating about -0.14 per unit of risk. If you would invest 10,856,300 in JYP Entertainment Corp on August 25, 2024 and sell it today you would lose (4,246,300) from holding JYP Entertainment Corp or give up 39.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Hana Technology Co
Performance |
| Timeline |
| JYP Entertainment Corp |
| Hana Technology |
JYP Entertainment and Hana Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Hana Technology
The main advantage of trading using opposite JYP Entertainment and Hana Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Hana Technology 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 Hana Technology will offset losses from the drop in Hana Technology's long position.| JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. LG Energy Solution | JYP Entertainment vs. SK Hynix |
| Hana Technology vs. Hwangkum Steel Technology | Hana Technology vs. A Tech Solution Co | Hana Technology vs. JYP Entertainment Corp | Hana Technology vs. SS TECH |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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