Correlation Between YG Entertainment and Microfriend
Can any of the company-specific risk be diversified away by investing in both YG Entertainment and Microfriend 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 Microfriend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and Microfriend, you can compare the effects of market volatilities on YG Entertainment and Microfriend 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 Microfriend. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and Microfriend.
Diversification Opportunities for YG Entertainment and Microfriend
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 122870 and Microfriend is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and Microfriend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microfriend 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 Microfriend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microfriend has no effect on the direction of YG Entertainment i.e., YG Entertainment and Microfriend go up and down completely randomly.
Pair Corralation between YG Entertainment and Microfriend
Assuming the 90 days trading horizon YG Entertainment is expected to generate 0.76 times more return on investment than Microfriend. However, YG Entertainment is 1.31 times less risky than Microfriend. It trades about 0.32 of its potential returns per unit of risk. Microfriend is currently generating about -0.18 per unit of risk. If you would invest 4,470,000 in YG Entertainment on November 3, 2024 and sell it today you would earn a total of 515,000 from holding YG Entertainment or generate 11.52% 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. Microfriend
Performance |
| Timeline |
| YG Entertainment |
| Microfriend |
YG Entertainment and Microfriend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and Microfriend
The main advantage of trading using opposite YG Entertainment and Microfriend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment position performs unexpectedly, Microfriend 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 Microfriend will offset losses from the drop in Microfriend's long position.| YG Entertainment vs. Nasmedia Co | YG Entertainment vs. SH Energy Chemical | YG Entertainment vs. DoubleU Games Co | YG Entertainment vs. Clean Science co |
| Microfriend vs. Samyang Foods Co | Microfriend vs. KEPCO Engineering Construction | Microfriend vs. Daewoo Engineering Construction | Microfriend vs. Alton Sports CoLtd |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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