Correlation Between JYP Entertainment and Innometry
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Innometry 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 Innometry 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 Innometry Co, you can compare the effects of market volatilities on JYP Entertainment and Innometry 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 Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Innometry.
Diversification Opportunities for JYP Entertainment and Innometry
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JYP and Innometry is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry 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 Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Innometry go up and down completely randomly.
Pair Corralation between JYP Entertainment and Innometry
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 1.01 times more return on investment than Innometry. However, JYP Entertainment is 1.01 times more volatile than Innometry Co. It trades about 0.02 of its potential returns per unit of risk. Innometry Co is currently generating about -0.03 per unit of risk. If you would invest 7,008,875 in JYP Entertainment Corp on October 21, 2024 and sell it today you would earn a total of 631,125 from holding JYP Entertainment Corp or generate 9.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. Innometry Co
Performance |
| Timeline |
| JYP Entertainment Corp |
| Innometry |
JYP Entertainment and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Innometry
The main advantage of trading using opposite JYP Entertainment and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| JYP Entertainment vs. Samsung Publishing Co | JYP Entertainment vs. Tway Air Co | JYP Entertainment vs. Tuksu Engineering ConstructionLtd | JYP Entertainment vs. GS Engineering Construction |
| Innometry vs. Nice Information Telecommunication | Innometry vs. Korean Reinsurance Co | Innometry vs. Samlip General Foods | Innometry vs. Seoul Electronics Telecom |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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