Correlation Between YG Entertainment and Sangshin Electronics
Can any of the company-specific risk be diversified away by investing in both YG Entertainment and Sangshin Electronics 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 Sangshin Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and Sangshin Electronics Co, you can compare the effects of market volatilities on YG Entertainment and Sangshin Electronics 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 Sangshin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and Sangshin Electronics.
Diversification Opportunities for YG Entertainment and Sangshin Electronics
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 122870 and Sangshin is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and Sangshin Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangshin Electronics 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 Sangshin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangshin Electronics has no effect on the direction of YG Entertainment i.e., YG Entertainment and Sangshin Electronics go up and down completely randomly.
Pair Corralation between YG Entertainment and Sangshin Electronics
Assuming the 90 days trading horizon YG Entertainment is expected to generate 1.45 times more return on investment than Sangshin Electronics. However, YG Entertainment is 1.45 times more volatile than Sangshin Electronics Co. It trades about 0.12 of its potential returns per unit of risk. Sangshin Electronics Co is currently generating about -0.13 per unit of risk. If you would invest 3,830,000 in YG Entertainment on October 14, 2024 and sell it today you would earn a total of 795,000 from holding YG Entertainment or generate 20.76% 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. Sangshin Electronics Co
Performance |
| Timeline |
| YG Entertainment |
| Sangshin Electronics |
YG Entertainment and Sangshin Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and Sangshin Electronics
The main advantage of trading using opposite YG Entertainment and Sangshin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment position performs unexpectedly, Sangshin Electronics 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 Sangshin Electronics will offset losses from the drop in Sangshin Electronics' long position.| YG Entertainment vs. Ssangyong Information Communication | YG Entertainment vs. ECSTELECOM Co | YG Entertainment vs. Lotte Chilsung Beverage | YG Entertainment vs. Heungkuk Metaltech CoLtd |
| Sangshin Electronics vs. YG Entertainment | Sangshin Electronics vs. T3 Entertainment Co | Sangshin Electronics vs. Dongkuk Structures Construction | Sangshin Electronics vs. Seoam Machinery Industry |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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