Correlation Between YG Entertainment and Barunson Entertainment
Can any of the company-specific risk be diversified away by investing in both YG Entertainment and Barunson Entertainment 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 Barunson Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and Barunson Entertainment Arts, you can compare the effects of market volatilities on YG Entertainment and Barunson Entertainment 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 Barunson Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and Barunson Entertainment.
Diversification Opportunities for YG Entertainment and Barunson Entertainment
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 122870 and Barunson is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and Barunson Entertainment Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barunson Entertainment 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 Barunson Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barunson Entertainment has no effect on the direction of YG Entertainment i.e., YG Entertainment and Barunson Entertainment go up and down completely randomly.
Pair Corralation between YG Entertainment and Barunson Entertainment
Assuming the 90 days trading horizon YG Entertainment is expected to generate 1.11 times more return on investment than Barunson Entertainment. However, YG Entertainment is 1.11 times more volatile than Barunson Entertainment Arts. It trades about -0.04 of its potential returns per unit of risk. Barunson Entertainment Arts is currently generating about -0.06 per unit of risk. If you would invest 7,223,591 in YG Entertainment on September 12, 2024 and sell it today you would lose (2,793,591) from holding YG Entertainment or give up 38.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YG Entertainment vs. Barunson Entertainment Arts
Performance |
| Timeline |
| YG Entertainment |
| Barunson Entertainment |
YG Entertainment and Barunson Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YG Entertainment and Barunson Entertainment
The main advantage of trading using opposite YG Entertainment and Barunson Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment position performs unexpectedly, Barunson Entertainment 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 Barunson Entertainment will offset losses from the drop in Barunson Entertainment's long position.| YG Entertainment vs. JYP Entertainment | YG Entertainment vs. SM Entertainment Co | YG Entertainment vs. Cube Entertainment | YG Entertainment vs. FNC Entertainment Co |
| Barunson Entertainment vs. YG Entertainment | Barunson Entertainment vs. JYP Entertainment | Barunson Entertainment vs. Cube Entertainment | Barunson Entertainment vs. FNC Entertainment Co |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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