Correlation Between JYP Entertainment and Insun Environment
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Insun Environment 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 Insun Environment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Insun Environment New, you can compare the effects of market volatilities on JYP Entertainment and Insun Environment 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 Insun Environment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Insun Environment.
Diversification Opportunities for JYP Entertainment and Insun Environment
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and Insun is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Insun Environment New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insun Environment New 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 Insun Environment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insun Environment New has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Insun Environment go up and down completely randomly.
Pair Corralation between JYP Entertainment and Insun Environment
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 1.74 times more return on investment than Insun Environment. However, JYP Entertainment is 1.74 times more volatile than Insun Environment New. It trades about 0.01 of its potential returns per unit of risk. Insun Environment New is currently generating about -0.05 per unit of risk. If you would invest 7,158,802 in JYP Entertainment on October 1, 2024 and sell it today you would lose (298,802) from holding JYP Entertainment or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.06% |
| Values | Daily Returns |
JYP Entertainment vs. Insun Environment New
Performance |
| Timeline |
| JYP Entertainment |
| Insun Environment New |
JYP Entertainment and Insun Environment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Insun Environment
The main advantage of trading using opposite JYP Entertainment and Insun Environment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Insun Environment 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 Insun Environment will offset losses from the drop in Insun Environment'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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