Correlation Between Samsung Biologics and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both Samsung Biologics and JYP 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 Samsung Biologics and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung Biologics Co and JYP Entertainment Corp, you can compare the effects of market volatilities on Samsung Biologics and JYP 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 Samsung Biologics with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung Biologics and JYP Entertainment.
Diversification Opportunities for Samsung Biologics and JYP Entertainment
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Samsung and JYP is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Samsung Biologics Co and JYP Entertainment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JYP Entertainment Corp and Samsung Biologics 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 Samsung Biologics Co are associated (or correlated) with JYP Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JYP Entertainment Corp has no effect on the direction of Samsung Biologics i.e., Samsung Biologics and JYP Entertainment go up and down completely randomly.
Pair Corralation between Samsung Biologics and JYP Entertainment
Assuming the 90 days trading horizon Samsung Biologics Co is expected to under-perform the JYP Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Samsung Biologics Co is 2.95 times less risky than JYP Entertainment. The stock trades about -0.26 of its potential returns per unit of risk. The JYP Entertainment Corp is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 5,120,000 in JYP Entertainment Corp on August 25, 2024 and sell it today you would earn a total of 1,490,000 from holding JYP Entertainment Corp or generate 29.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung Biologics Co vs. JYP Entertainment Corp
Performance |
| Timeline |
| Samsung Biologics |
| JYP Entertainment Corp |
Samsung Biologics and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung Biologics and JYP Entertainment
The main advantage of trading using opposite Samsung Biologics and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung Biologics position performs unexpectedly, JYP 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 JYP Entertainment will offset losses from the drop in JYP Entertainment's long position.| Samsung Biologics vs. InfoBank | Samsung Biologics vs. DataSolution | Samsung Biologics vs. Koryo Credit Information | Samsung Biologics vs. Settlebank |
| JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. LG Energy Solution | JYP Entertainment vs. SK Hynix |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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