Correlation Between JYP Entertainment and SK Bioscience
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and SK Bioscience 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 SK Bioscience 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 SK Bioscience Co, you can compare the effects of market volatilities on JYP Entertainment and SK Bioscience 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 SK Bioscience. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and SK Bioscience.
Diversification Opportunities for JYP Entertainment and SK Bioscience
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between JYP and 302440 is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and SK Bioscience Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Bioscience 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 SK Bioscience. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Bioscience has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and SK Bioscience go up and down completely randomly.
Pair Corralation between JYP Entertainment and SK Bioscience
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to generate 1.12 times more return on investment than SK Bioscience. However, JYP Entertainment is 1.12 times more volatile than SK Bioscience Co. It trades about 0.02 of its potential returns per unit of risk. SK Bioscience Co is currently generating about -0.02 per unit of risk. If you would invest 7,237,533 in JYP Entertainment Corp on November 2, 2024 and sell it today you would earn a total of 262,467 from holding JYP Entertainment Corp or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. SK Bioscience Co
Performance |
| Timeline |
| JYP Entertainment Corp |
| SK Bioscience |
JYP Entertainment and SK Bioscience Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and SK Bioscience
The main advantage of trading using opposite JYP Entertainment and SK Bioscience positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, SK Bioscience 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 SK Bioscience will offset losses from the drop in SK Bioscience'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 |
| SK Bioscience vs. Korea Information Engineering | SK Bioscience vs. SCI Information Service | SK Bioscience vs. Inzi Display CoLtd | SK Bioscience vs. Lotte Data Communication |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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