Correlation Between JYP Entertainment and Lee Ku
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Lee Ku 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 Lee Ku into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Lee Ku Industrial, you can compare the effects of market volatilities on JYP Entertainment and Lee Ku 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 Lee Ku. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Lee Ku.
Diversification Opportunities for JYP Entertainment and Lee Ku
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and Lee is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Lee Ku Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lee Ku Industrial 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 Lee Ku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lee Ku Industrial has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Lee Ku go up and down completely randomly.
Pair Corralation between JYP Entertainment and Lee Ku
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 1.94 times more return on investment than Lee Ku. However, JYP Entertainment is 1.94 times more volatile than Lee Ku Industrial. It trades about 0.09 of its potential returns per unit of risk. Lee Ku Industrial is currently generating about 0.13 per unit of risk. If you would invest 7,240,480 in JYP Entertainment on October 17, 2024 and sell it today you would earn a total of 359,520 from holding JYP Entertainment or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment vs. Lee Ku Industrial
Performance |
| Timeline |
| JYP Entertainment |
| Lee Ku Industrial |
JYP Entertainment and Lee Ku Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Lee Ku
The main advantage of trading using opposite JYP Entertainment and Lee Ku positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Lee Ku 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 Lee Ku will offset losses from the drop in Lee Ku's long position.| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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