Correlation Between EBEST Investment and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both EBEST Investment 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 EBEST Investment and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and JYP Entertainment, you can compare the effects of market volatilities on EBEST Investment 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 EBEST Investment with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and JYP Entertainment.
Diversification Opportunities for EBEST Investment and JYP Entertainment
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EBEST and JYP is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and JYP Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment and EBEST Investment 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 EBEST Investment Securities 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 EBEST Investment i.e., EBEST Investment and JYP Entertainment go up and down completely randomly.
Pair Corralation between EBEST Investment and JYP Entertainment
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the JYP Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.94 times less risky than JYP Entertainment. The stock trades about -0.32 of its potential returns per unit of risk. The JYP Entertainment is currently generating about 0.61 of returns per unit of risk over similar time horizon. If you would invest 5,390,000 in JYP Entertainment on September 4, 2024 and sell it today you would earn a total of 2,320,000 from holding JYP Entertainment or generate 43.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. JYP Entertainment
Performance |
| Timeline |
| EBEST Investment Sec |
| JYP Entertainment |
EBEST Investment and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and JYP Entertainment
The main advantage of trading using opposite EBEST Investment and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment 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.| EBEST Investment vs. ENERGYMACHINERY KOREA CoLtd | EBEST Investment vs. Hanshin Construction Co | EBEST Investment vs. Seohee Construction Co | EBEST Investment vs. Daejung Chemicals Metals |
| JYP Entertainment vs. Korea New Network | JYP Entertainment vs. ICD Co | JYP Entertainment vs. DYPNF CoLtd | JYP Entertainment vs. Busan Industrial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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