Correlation Between JYP Entertainment and TSI
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and TSI 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 TSI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and TSI Co, you can compare the effects of market volatilities on JYP Entertainment and TSI 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 TSI. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and TSI.
Diversification Opportunities for JYP Entertainment and TSI
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JYP and TSI is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and TSI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSI 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 TSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSI Co has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and TSI go up and down completely randomly.
Pair Corralation between JYP Entertainment and TSI
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 0.99 times more return on investment than TSI. However, JYP Entertainment is 1.01 times less risky than TSI. It trades about 0.2 of its potential returns per unit of risk. TSI Co is currently generating about -0.09 per unit of risk. If you would invest 5,346,053 in JYP Entertainment on November 2, 2024 and sell it today you would earn a total of 2,153,947 from holding JYP Entertainment or generate 40.29% 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. TSI Co
Performance |
| Timeline |
| JYP Entertainment |
| TSI Co |
JYP Entertainment and TSI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JYP Entertainment and TSI
The main advantage of trading using opposite JYP Entertainment and TSI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, TSI 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 TSI will offset losses from the drop in TSI's long position.| JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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