Correlation Between YG Entertainment and DC Media
Can any of the company-specific risk be diversified away by investing in both YG Entertainment and DC Media 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 DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and DC Media Co, you can compare the effects of market volatilities on YG Entertainment and DC Media 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 DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and DC Media.
Diversification Opportunities for YG Entertainment and DC Media
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 122870 and 263720 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and DC Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media 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 DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media has no effect on the direction of YG Entertainment i.e., YG Entertainment and DC Media go up and down completely randomly.
Pair Corralation between YG Entertainment and DC Media
Assuming the 90 days trading horizon YG Entertainment is expected to generate 0.83 times more return on investment than DC Media. However, YG Entertainment is 1.2 times less risky than DC Media. It trades about 0.36 of its potential returns per unit of risk. DC Media Co is currently generating about 0.18 per unit of risk. If you would invest 3,845,000 in YG Entertainment on August 31, 2024 and sell it today you would earn a total of 875,000 from holding YG Entertainment or generate 22.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YG Entertainment vs. DC Media Co
Performance |
| Timeline |
| YG Entertainment |
| DC Media |
YG Entertainment and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and DC Media
The main advantage of trading using opposite YG Entertainment and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment position performs unexpectedly, DC Media 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 DC Media will offset losses from the drop in DC Media'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 |
| DC Media vs. Display Tech Co | DC Media vs. Sangsin Energy Display | DC Media vs. CG Hi Tech | DC Media vs. Inzi Display 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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