Correlation Between JYP Entertainment and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Vissem Electronics 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 Vissem Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Vissem Electronics Co, you can compare the effects of market volatilities on JYP Entertainment and Vissem Electronics 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 Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Vissem Electronics.
Diversification Opportunities for JYP Entertainment and Vissem Electronics
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JYP and Vissem is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Vissem Electronics go up and down completely randomly.
Pair Corralation between JYP Entertainment and Vissem Electronics
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 2.41 times more return on investment than Vissem Electronics. However, JYP Entertainment is 2.41 times more volatile than Vissem Electronics Co. It trades about 0.12 of its potential returns per unit of risk. Vissem Electronics Co is currently generating about 0.14 per unit of risk. If you would invest 7,171,051 in JYP Entertainment on October 20, 2024 and sell it today you would earn a total of 468,949 from holding JYP Entertainment or generate 6.54% 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. Vissem Electronics Co
Performance |
| Timeline |
| JYP Entertainment |
| Vissem Electronics |
JYP Entertainment and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Vissem Electronics
The main advantage of trading using opposite JYP Entertainment and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Vissem Electronics 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
| Vissem Electronics vs. Korea New Network | Vissem Electronics vs. Dong A Eltek | Vissem Electronics vs. Dreamus Company | Vissem Electronics vs. SK Bioscience 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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