Correlation Between JYP Entertainment and Sejong Telecom
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Sejong Telecom 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 Sejong Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Sejong Telecom, you can compare the effects of market volatilities on JYP Entertainment and Sejong Telecom 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 Sejong Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Sejong Telecom.
Diversification Opportunities for JYP Entertainment and Sejong Telecom
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JYP and Sejong is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Sejong Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sejong Telecom 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 Sejong Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sejong Telecom has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Sejong Telecom go up and down completely randomly.
Pair Corralation between JYP Entertainment and Sejong Telecom
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 2.03 times more return on investment than Sejong Telecom. However, JYP Entertainment is 2.03 times more volatile than Sejong Telecom. It trades about 0.42 of its potential returns per unit of risk. Sejong Telecom is currently generating about -0.36 per unit of risk. If you would invest 5,350,000 in JYP Entertainment on September 13, 2024 and sell it today you would earn a total of 1,880,000 from holding JYP Entertainment or generate 35.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment vs. Sejong Telecom
Performance |
| Timeline |
| JYP Entertainment |
| Sejong Telecom |
JYP Entertainment and Sejong Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Sejong Telecom
The main advantage of trading using opposite JYP Entertainment and Sejong Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Sejong Telecom 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 Sejong Telecom will offset losses from the drop in Sejong Telecom's long position.| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. Cube Entertainment | JYP Entertainment vs. FNC Entertainment Co |
| Sejong Telecom vs. YG Entertainment | Sejong Telecom vs. JYP Entertainment | Sejong Telecom vs. Cube Entertainment | Sejong Telecom vs. FNC Entertainment 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |