Correlation Between JYP Entertainment and Genie Music
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Genie Music 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 Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Genie Music, you can compare the effects of market volatilities on JYP Entertainment and Genie Music 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 Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Genie Music.
Diversification Opportunities for JYP Entertainment and Genie Music
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and Genie is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music 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 Genie Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genie Music has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Genie Music go up and down completely randomly.
Pair Corralation between JYP Entertainment and Genie Music
Assuming the 90 days trading horizon JYP Entertainment is expected to under-perform the Genie Music. But the stock apears to be less risky and, when comparing its historical volatility, JYP Entertainment is 1.23 times less risky than Genie Music. The stock trades about -0.02 of its potential returns per unit of risk. The Genie Music is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 217,000 in Genie Music on September 27, 2024 and sell it today you would earn a total of 1,000.00 from holding Genie Music or generate 0.46% 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. Genie Music
Performance |
| Timeline |
| JYP Entertainment |
| Genie Music |
JYP Entertainment and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Genie Music
The main advantage of trading using opposite JYP Entertainment and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Genie Music 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 Genie Music will offset losses from the drop in Genie Music's long position.| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
| Genie Music vs. Homecast CoLtd | Genie Music vs. Cuckoo Homesys Co | Genie Music vs. Home Center Holdings | Genie Music vs. SH Energy Chemical |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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