Correlation Between EBEST Investment and YG Entertainment
Can any of the company-specific risk be diversified away by investing in both EBEST Investment and YG 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 YG 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 YG Entertainment, you can compare the effects of market volatilities on EBEST Investment and YG 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 YG Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and YG Entertainment.
Diversification Opportunities for EBEST Investment and YG Entertainment
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EBEST and 122870 is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and YG Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YG 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 YG Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YG Entertainment has no effect on the direction of EBEST Investment i.e., EBEST Investment and YG Entertainment go up and down completely randomly.
Pair Corralation between EBEST Investment and YG Entertainment
Assuming the 90 days trading horizon EBEST Investment Securities is expected to under-perform the YG Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, EBEST Investment Securities is 1.47 times less risky than YG Entertainment. The stock trades about -0.32 of its potential returns per unit of risk. The YG Entertainment is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 4,210,000 in YG Entertainment on September 4, 2024 and sell it today you would earn a total of 715,000 from holding YG Entertainment or generate 16.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. YG Entertainment
Performance |
| Timeline |
| EBEST Investment Sec |
| YG Entertainment |
EBEST Investment and YG Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and YG Entertainment
The main advantage of trading using opposite EBEST Investment and YG Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment position performs unexpectedly, YG 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 YG Entertainment will offset losses from the drop in YG 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 |
| YG Entertainment vs. JYP Entertainment | YG Entertainment vs. SM Entertainment Co | YG Entertainment vs. Cube Entertainment | YG Entertainment vs. FNC Entertainment 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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