Correlation Between JYP Entertainment and THiRA UTECH
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and THiRA UTECH 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 THiRA UTECH 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 THiRA UTECH LTD, you can compare the effects of market volatilities on JYP Entertainment and THiRA UTECH 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 THiRA UTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and THiRA UTECH.
Diversification Opportunities for JYP Entertainment and THiRA UTECH
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and THiRA is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and THiRA UTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THiRA UTECH LTD 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 THiRA UTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THiRA UTECH LTD has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and THiRA UTECH go up and down completely randomly.
Pair Corralation between JYP Entertainment and THiRA UTECH
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 3.4 times less return on investment than THiRA UTECH. But when comparing it to its historical volatility, JYP Entertainment Corp is 1.3 times less risky than THiRA UTECH. It trades about 0.1 of its potential returns per unit of risk. THiRA UTECH LTD is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 449,000 in THiRA UTECH LTD on October 20, 2024 and sell it today you would earn a total of 101,000 from holding THiRA UTECH LTD or generate 22.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment Corp vs. THiRA UTECH LTD
Performance |
| Timeline |
| JYP Entertainment Corp |
| THiRA UTECH LTD |
JYP Entertainment and THiRA UTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and THiRA UTECH
The main advantage of trading using opposite JYP Entertainment and THiRA UTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, THiRA UTECH 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 THiRA UTECH will offset losses from the drop in THiRA UTECH's long position.| JYP Entertainment vs. Shinsegae Food | JYP Entertainment vs. Haitai Confectionery Foods | JYP Entertainment vs. FoodNamoo | JYP Entertainment vs. Youl Chon Chemical |
| THiRA UTECH vs. Koh Young Technology | THiRA UTECH vs. ENF Technology Co | THiRA UTECH vs. Sempio Foods Co | THiRA UTECH vs. Nable Communications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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