Correlation Between SCI Information and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both SCI Information and JYP Entertainment 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 SCI Information and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Information Service and JYP Entertainment Corp, you can compare the effects of market volatilities on SCI Information and JYP Entertainment 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 SCI Information with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Information and JYP Entertainment.
Diversification Opportunities for SCI Information and JYP Entertainment
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCI and JYP is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SCI Information Service and JYP Entertainment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment Corp and SCI Information 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 SCI Information Service are associated (or correlated) with JYP Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JYP Entertainment Corp has no effect on the direction of SCI Information i.e., SCI Information and JYP Entertainment go up and down completely randomly.
Pair Corralation between SCI Information and JYP Entertainment
Assuming the 90 days trading horizon SCI Information Service is expected to under-perform the JYP Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, SCI Information Service is 1.13 times less risky than JYP Entertainment. The stock trades about -0.03 of its potential returns per unit of risk. The JYP Entertainment Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,277,300 in JYP Entertainment Corp on November 5, 2024 and sell it today you would earn a total of 222,700 from holding JYP Entertainment Corp or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
SCI Information Service vs. JYP Entertainment Corp
Performance |
| Timeline |
| SCI Information Service |
| JYP Entertainment Corp |
SCI Information and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Information and JYP Entertainment
The main advantage of trading using opposite SCI Information and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Information position performs unexpectedly, JYP Entertainment 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 JYP Entertainment will offset losses from the drop in JYP Entertainment's long position.| SCI Information vs. Haitai Confectionery Foods | SCI Information vs. Hanjin Transportation Co | SCI Information vs. Daesung Hi Tech Co | SCI Information vs. Iljin Display |
| JYP Entertainment vs. Daesung Hi Tech Co | JYP Entertainment vs. Shinsegae Food | JYP Entertainment vs. Shinhan Inverse Silver | JYP Entertainment vs. Dongbang Transport Logistics |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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