Correlation Between YG Entertainment and Nable Communications
Can any of the company-specific risk be diversified away by investing in both YG Entertainment and Nable Communications 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 Nable Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and Nable Communications, you can compare the effects of market volatilities on YG Entertainment and Nable Communications 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 Nable Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and Nable Communications.
Diversification Opportunities for YG Entertainment and Nable Communications
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 122870 and Nable is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and Nable Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nable Communications 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 Nable Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nable Communications has no effect on the direction of YG Entertainment i.e., YG Entertainment and Nable Communications go up and down completely randomly.
Pair Corralation between YG Entertainment and Nable Communications
Assuming the 90 days trading horizon YG Entertainment is expected to generate 1.82 times more return on investment than Nable Communications. However, YG Entertainment is 1.82 times more volatile than Nable Communications. It trades about 0.01 of its potential returns per unit of risk. Nable Communications is currently generating about -0.01 per unit of risk. If you would invest 5,993,711 in YG Entertainment on November 27, 2024 and sell it today you would lose (233,711) from holding YG Entertainment or give up 3.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YG Entertainment vs. Nable Communications
Performance |
| Timeline |
| YG Entertainment |
| Nable Communications |
YG Entertainment and Nable Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and Nable Communications
The main advantage of trading using opposite YG Entertainment and Nable Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment position performs unexpectedly, Nable Communications 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 Nable Communications will offset losses from the drop in Nable Communications' long position.| YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. LG Energy Solution | YG Entertainment vs. SK Hynix |
| Nable Communications vs. Union Materials Corp | Nable Communications vs. Hannong Chemicals | Nable Communications vs. LG Household Healthcare | Nable Communications vs. Hyosung Advanced Materials |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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