Correlation Between JYP Entertainment and Itcen Co
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Itcen Co 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 Itcen Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Itcen Co, you can compare the effects of market volatilities on JYP Entertainment and Itcen Co 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 Itcen Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Itcen Co.
Diversification Opportunities for JYP Entertainment and Itcen Co
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JYP and Itcen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Itcen Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itcen Co 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 Itcen Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itcen Co has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Itcen Co go up and down completely randomly.
Pair Corralation between JYP Entertainment and Itcen Co
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 0.64 times more return on investment than Itcen Co. However, JYP Entertainment is 1.56 times less risky than Itcen Co. It trades about 0.03 of its potential returns per unit of risk. Itcen Co is currently generating about -0.03 per unit of risk. If you would invest 6,750,000 in JYP Entertainment on September 26, 2024 and sell it today you would earn a total of 80,000 from holding JYP Entertainment or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JYP Entertainment vs. Itcen Co
Performance |
| Timeline |
| JYP Entertainment |
| Itcen Co |
JYP Entertainment and Itcen Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and Itcen Co
The main advantage of trading using opposite JYP Entertainment and Itcen Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Itcen Co 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 Itcen Co will offset losses from the drop in Itcen Co'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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