Correlation Between JYP Entertainment and Yuhan
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Yuhan 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 Yuhan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Yuhan, you can compare the effects of market volatilities on JYP Entertainment and Yuhan 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 Yuhan. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Yuhan.
Diversification Opportunities for JYP Entertainment and Yuhan
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between JYP and Yuhan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Yuhan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuhan 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 are associated (or correlated) with Yuhan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuhan has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Yuhan go up and down completely randomly.
Pair Corralation between JYP Entertainment and Yuhan
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 4.64 times less return on investment than Yuhan. But when comparing it to its historical volatility, JYP Entertainment is 1.01 times less risky than Yuhan. It trades about 0.02 of its potential returns per unit of risk. Yuhan is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,980,952 in Yuhan on November 2, 2024 and sell it today you would earn a total of 8,009,048 from holding Yuhan or generate 160.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment vs. Yuhan
Performance |
| Timeline |
| JYP Entertainment |
| Yuhan |
JYP Entertainment and Yuhan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Yuhan
The main advantage of trading using opposite JYP Entertainment and Yuhan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Yuhan 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 Yuhan will offset losses from the drop in Yuhan's long position.| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
| Yuhan vs. Dongil Metal Co | Yuhan vs. Heungkuk Metaltech CoLtd | Yuhan vs. Daishin Information Communications | Yuhan vs. SK Chemicals Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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