Correlation Between Amorepacific Corp and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both Amorepacific Corp 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 Amorepacific Corp and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amorepacific Corp and JYP Entertainment Corp, you can compare the effects of market volatilities on Amorepacific Corp 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 Amorepacific Corp with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amorepacific Corp and JYP Entertainment.
Diversification Opportunities for Amorepacific Corp and JYP Entertainment
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amorepacific and JYP is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Amorepacific Corp 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 Amorepacific Corp 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 Amorepacific Corp 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 Amorepacific Corp i.e., Amorepacific Corp and JYP Entertainment go up and down completely randomly.
Pair Corralation between Amorepacific Corp and JYP Entertainment
Assuming the 90 days trading horizon Amorepacific Corp is expected to under-perform the JYP Entertainment. In addition to that, Amorepacific Corp is 1.24 times more volatile than JYP Entertainment Corp. It trades about -0.07 of its total potential returns per unit of risk. JYP Entertainment Corp is currently generating about 0.04 per unit of volatility. If you would invest 7,000,000 in JYP Entertainment Corp on September 3, 2024 and sell it today you would earn a total of 640,000 from holding JYP Entertainment Corp or generate 9.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amorepacific Corp vs. JYP Entertainment Corp
Performance |
| Timeline |
| Amorepacific Corp |
| JYP Entertainment Corp |
Amorepacific Corp and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amorepacific Corp and JYP Entertainment
The main advantage of trading using opposite Amorepacific Corp and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amorepacific Corp 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.| Amorepacific Corp vs. JYP Entertainment Corp | Amorepacific Corp vs. TJ media Co | Amorepacific Corp vs. Lotte Data Communication | Amorepacific Corp vs. Samsung Life Insurance |
| JYP Entertainment vs. Sungchang Autotech Co | JYP Entertainment vs. Alton Sports CoLtd | JYP Entertainment vs. FNSTech Co | JYP Entertainment vs. Lion Chemtech 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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