Correlation Between KB Financial and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both KB Financial 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 KB Financial and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KB Financial Group and JYP Entertainment, you can compare the effects of market volatilities on KB Financial 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 KB Financial with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KB Financial and JYP Entertainment.
Diversification Opportunities for KB Financial and JYP Entertainment
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 105560 and JYP is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding KB Financial Group and JYP Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment and KB Financial 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 KB Financial Group 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 KB Financial i.e., KB Financial and JYP Entertainment go up and down completely randomly.
Pair Corralation between KB Financial and JYP Entertainment
Assuming the 90 days trading horizon KB Financial is expected to generate 3.47 times less return on investment than JYP Entertainment. But when comparing it to its historical volatility, KB Financial Group is 2.51 times less risky than JYP Entertainment. It trades about 0.08 of its potential returns per unit of risk. JYP Entertainment is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,171,051 in JYP Entertainment on October 20, 2024 and sell it today you would earn a total of 468,949 from holding JYP Entertainment or generate 6.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KB Financial Group vs. JYP Entertainment
Performance |
| Timeline |
| KB Financial Group |
| JYP Entertainment |
KB Financial and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KB Financial and JYP Entertainment
The main advantage of trading using opposite KB Financial and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KB Financial 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.| KB Financial vs. BGF Retail Co | KB Financial vs. Hanwha Life Insurance | KB Financial vs. Sajo Seafood | KB Financial vs. Tway Air 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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