Correlation Between JYP Entertainment and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Phoenix Materials 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 Phoenix Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Phoenix Materials Co, you can compare the effects of market volatilities on JYP Entertainment and Phoenix Materials 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 Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Phoenix Materials.
Diversification Opportunities for JYP Entertainment and Phoenix Materials
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JYP and Phoenix is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials 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 Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Phoenix Materials go up and down completely randomly.
Pair Corralation between JYP Entertainment and Phoenix Materials
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 0.97 times more return on investment than Phoenix Materials. However, JYP Entertainment is 1.03 times less risky than Phoenix Materials. It trades about 0.22 of its potential returns per unit of risk. Phoenix Materials Co is currently generating about -0.03 per unit of risk. If you would invest 5,038,581 in JYP Entertainment on October 20, 2024 and sell it today you would earn a total of 2,601,419 from holding JYP Entertainment or generate 51.63% 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. Phoenix Materials Co
Performance |
| Timeline |
| JYP Entertainment |
| Phoenix Materials |
JYP Entertainment and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Phoenix Materials
The main advantage of trading using opposite JYP Entertainment and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' long position.| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
| Phoenix Materials vs. Korea Investment Holdings | Phoenix Materials vs. Stic Investments | Phoenix Materials vs. Innowireless Co | Phoenix Materials vs. Inzi Display CoLtd |
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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