Correlation Between YG Entertainment and Cosmecca Korea
Can any of the company-specific risk be diversified away by investing in both YG Entertainment and Cosmecca Korea 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 Cosmecca Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and Cosmecca Korea Co, you can compare the effects of market volatilities on YG Entertainment and Cosmecca Korea 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 Cosmecca Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and Cosmecca Korea.
Diversification Opportunities for YG Entertainment and Cosmecca Korea
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 122870 and Cosmecca is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and Cosmecca Korea Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmecca Korea 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 Cosmecca Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmecca Korea has no effect on the direction of YG Entertainment i.e., YG Entertainment and Cosmecca Korea go up and down completely randomly.
Pair Corralation between YG Entertainment and Cosmecca Korea
Assuming the 90 days trading horizon YG Entertainment is expected to generate 0.7 times more return on investment than Cosmecca Korea. However, YG Entertainment is 1.42 times less risky than Cosmecca Korea. It trades about 0.08 of its potential returns per unit of risk. Cosmecca Korea Co is currently generating about -0.16 per unit of risk. If you would invest 4,315,000 in YG Entertainment on September 13, 2024 and sell it today you would earn a total of 180,000 from holding YG Entertainment or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YG Entertainment vs. Cosmecca Korea Co
Performance |
| Timeline |
| YG Entertainment |
| Cosmecca Korea |
YG Entertainment and Cosmecca Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and Cosmecca Korea
The main advantage of trading using opposite YG Entertainment and Cosmecca Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment position performs unexpectedly, Cosmecca Korea 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 Cosmecca Korea will offset losses from the drop in Cosmecca Korea's 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 |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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