Correlation Between JYP Entertainment and Dongsin Engineering
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Dongsin Engineering 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 Dongsin Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Dongsin Engineering Construction, you can compare the effects of market volatilities on JYP Entertainment and Dongsin Engineering 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 Dongsin Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Dongsin Engineering.
Diversification Opportunities for JYP Entertainment and Dongsin Engineering
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between JYP and Dongsin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Dongsin Engineering Constructi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongsin Engineering 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 Dongsin Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongsin Engineering has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Dongsin Engineering go up and down completely randomly.
Pair Corralation between JYP Entertainment and Dongsin Engineering
Assuming the 90 days trading horizon JYP Entertainment is expected to under-perform the Dongsin Engineering. But the stock apears to be less risky and, when comparing its historical volatility, JYP Entertainment is 2.38 times less risky than Dongsin Engineering. The stock trades about 0.0 of its potential returns per unit of risk. The Dongsin Engineering Construction is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,018,033 in Dongsin Engineering Construction on November 9, 2024 and sell it today you would earn a total of 2,236,967 from holding Dongsin Engineering Construction or generate 110.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.61% |
| Values | Daily Returns |
JYP Entertainment vs. Dongsin Engineering Constructi
Performance |
| Timeline |
| JYP Entertainment |
| Dongsin Engineering |
JYP Entertainment and Dongsin Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Dongsin Engineering
The main advantage of trading using opposite JYP Entertainment and Dongsin Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Dongsin Engineering 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 Dongsin Engineering will offset losses from the drop in Dongsin Engineering's long position.| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
| Dongsin Engineering vs. Kbi Metal Co | Dongsin Engineering vs. Korea Industrial Co | Dongsin Engineering vs. ChipsMedia | Dongsin Engineering vs. Industrial Bank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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