Correlation Between YG Entertainment and People Technology
Can any of the company-specific risk be diversified away by investing in both YG Entertainment and People Technology 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 YG Entertainment and People Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and People Technology, you can compare the effects of market volatilities on YG Entertainment and People Technology 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 YG Entertainment with a short position of People Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and People Technology.
Diversification Opportunities for YG Entertainment and People Technology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 122870 and People is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and People Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on People Technology and YG Entertainment 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 YG Entertainment are associated (or correlated) with People Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of People Technology has no effect on the direction of YG Entertainment i.e., YG Entertainment and People Technology go up and down completely randomly.
Pair Corralation between YG Entertainment and People Technology
Assuming the 90 days trading horizon YG Entertainment is expected to generate 1.01 times less return on investment than People Technology. But when comparing it to its historical volatility, YG Entertainment is 1.48 times less risky than People Technology. It trades about 0.03 of its potential returns per unit of risk. People Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,989,597 in People Technology on October 18, 2024 and sell it today you would earn a total of 50,403 from holding People Technology or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YG Entertainment vs. People Technology
Performance |
| Timeline |
| YG Entertainment |
| People Technology |
YG Entertainment and People Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and People Technology
The main advantage of trading using opposite YG Entertainment and People Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment position performs unexpectedly, People Technology 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 People Technology will offset losses from the drop in People Technology's long position.| YG Entertainment vs. Drb Industrial | YG Entertainment vs. LEENO Industrial | YG Entertainment vs. BIT Computer Co | YG Entertainment vs. Industrial Bank |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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