Correlation Between JYP Entertainment and MEDICOX
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and MEDICOX 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 MEDICOX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and MEDICOX Co, you can compare the effects of market volatilities on JYP Entertainment and MEDICOX 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 MEDICOX. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and MEDICOX.
Diversification Opportunities for JYP Entertainment and MEDICOX
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JYP and MEDICOX is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and MEDICOX Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICOX 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 MEDICOX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICOX has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and MEDICOX go up and down completely randomly.
Pair Corralation between JYP Entertainment and MEDICOX
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 0.55 times more return on investment than MEDICOX. However, JYP Entertainment is 1.83 times less risky than MEDICOX. It trades about 0.02 of its potential returns per unit of risk. MEDICOX Co is currently generating about -0.05 per unit of risk. If you would invest 7,178,523 in JYP Entertainment on November 2, 2024 and sell it today you would earn a total of 321,477 from holding JYP Entertainment or generate 4.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.58% |
Values | Daily Returns |
JYP Entertainment vs. MEDICOX Co
Performance |
Timeline |
JYP Entertainment |
MEDICOX |
JYP Entertainment and MEDICOX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JYP Entertainment and MEDICOX
The main advantage of trading using opposite JYP Entertainment and MEDICOX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, MEDICOX 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 MEDICOX will offset losses from the drop in MEDICOX'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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