Correlation Between Jin Air and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both Jin Air 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 Jin Air and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jin Air Co and JYP Entertainment Corp, you can compare the effects of market volatilities on Jin Air 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 Jin Air with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jin Air and JYP Entertainment.
Diversification Opportunities for Jin Air and JYP Entertainment
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jin and JYP is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jin Air 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 Jin Air 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 Jin Air 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 Jin Air i.e., Jin Air and JYP Entertainment go up and down completely randomly.
Pair Corralation between Jin Air and JYP Entertainment
Assuming the 90 days trading horizon Jin Air is expected to generate 7.86 times less return on investment than JYP Entertainment. But when comparing it to its historical volatility, Jin Air Co is 1.07 times less risky than JYP Entertainment. It trades about 0.05 of its potential returns per unit of risk. 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jin Air Co vs. JYP Entertainment Corp
Performance |
| Timeline |
| Jin Air |
| JYP Entertainment Corp |
Jin Air and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jin Air and JYP Entertainment
The main advantage of trading using opposite Jin Air and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jin Air 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.| Jin Air vs. Korea Shipbuilding Offshore | Jin Air vs. Nable Communications | Jin Air vs. Lotte Data Communication | Jin Air vs. Woori Technology |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stocks Directory Find actively traded stocks across global markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |