Correlation Between Daehan Steel and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both Daehan Steel 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 Daehan Steel and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daehan Steel and JYP Entertainment Corp, you can compare the effects of market volatilities on Daehan Steel 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 Daehan Steel with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daehan Steel and JYP Entertainment.
Diversification Opportunities for Daehan Steel and JYP Entertainment
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daehan and JYP is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Daehan Steel 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 Daehan Steel 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 Daehan Steel 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 Daehan Steel i.e., Daehan Steel and JYP Entertainment go up and down completely randomly.
Pair Corralation between Daehan Steel and JYP Entertainment
Assuming the 90 days trading horizon Daehan Steel is expected to generate 2.02 times less return on investment than JYP Entertainment. But when comparing it to its historical volatility, Daehan Steel is 1.26 times less risky than JYP Entertainment. It trades about 0.28 of its potential returns per unit of risk. JYP Entertainment Corp is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 5,080,000 in JYP Entertainment Corp on August 29, 2024 and sell it today you would earn a total of 1,900,000 from holding JYP Entertainment Corp or generate 37.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daehan Steel vs. JYP Entertainment Corp
Performance |
| Timeline |
| Daehan Steel |
| JYP Entertainment Corp |
Daehan Steel and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daehan Steel and JYP Entertainment
The main advantage of trading using opposite Daehan Steel and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daehan Steel 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.| Daehan Steel vs. LG Chemicals | Daehan Steel vs. Lotte Chemical Corp | Daehan Steel vs. Hyundai Steel | Daehan Steel vs. Seah Steel Corp |
| JYP Entertainment vs. PH Tech Co | JYP Entertainment vs. A Tech Solution Co | JYP Entertainment vs. SS TECH | JYP Entertainment vs. Ecoplastic |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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