Correlation Between ICD Co and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both ICD Co 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 ICD Co and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICD Co and JYP Entertainment, you can compare the effects of market volatilities on ICD Co 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 ICD Co with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICD Co and JYP Entertainment.
Diversification Opportunities for ICD Co and JYP Entertainment
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ICD and JYP is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ICD Co and JYP Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment and ICD Co 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 ICD Co 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 has no effect on the direction of ICD Co i.e., ICD Co and JYP Entertainment go up and down completely randomly.
Pair Corralation between ICD Co and JYP Entertainment
Assuming the 90 days trading horizon ICD Co is expected to generate 15.73 times less return on investment than JYP Entertainment. In addition to that, ICD Co is 1.08 times more volatile than JYP Entertainment. It trades about 0.02 of its total potential returns per unit of risk. JYP Entertainment is currently generating about 0.36 per unit of volatility. If you would invest 5,470,000 in JYP Entertainment on September 12, 2024 and sell it today you would earn a total of 1,650,000 from holding JYP Entertainment or generate 30.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ICD Co vs. JYP Entertainment
Performance |
| Timeline |
| ICD Co |
| JYP Entertainment |
ICD Co and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICD Co and JYP Entertainment
The main advantage of trading using opposite ICD Co and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICD Co 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.| ICD Co vs. SFA Engineering | ICD Co vs. APS Holdings | ICD Co vs. Soulbrain Holdings Co | ICD Co vs. JUSUNG ENGINEERING Co |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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