Correlation Between Lotte Data and JYP Entertainment
Can any of the company-specific risk be diversified away by investing in both Lotte Data 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 Lotte Data and JYP Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lotte Data Communication and JYP Entertainment Corp, you can compare the effects of market volatilities on Lotte Data 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 Lotte Data with a short position of JYP Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lotte Data and JYP Entertainment.
Diversification Opportunities for Lotte Data and JYP Entertainment
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lotte and JYP is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Lotte Data Communication 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 Lotte Data 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 Lotte Data Communication 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 Lotte Data i.e., Lotte Data and JYP Entertainment go up and down completely randomly.
Pair Corralation between Lotte Data and JYP Entertainment
Assuming the 90 days trading horizon Lotte Data Communication is expected to under-perform the JYP Entertainment. In addition to that, Lotte Data is 1.07 times more volatile than JYP Entertainment Corp. It trades about -0.01 of its total potential returns per unit of risk. JYP Entertainment Corp is currently generating about 0.02 per unit of volatility. If you would invest 7,277,300 in JYP Entertainment Corp on November 5, 2024 and sell it today you would earn a total of 222,700 from holding JYP Entertainment Corp or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Lotte Data Communication vs. JYP Entertainment Corp
Performance |
| Timeline |
| Lotte Data Communication |
| JYP Entertainment Corp |
Lotte Data and JYP Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lotte Data and JYP Entertainment
The main advantage of trading using opposite Lotte Data and JYP Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lotte Data 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.| Lotte Data vs. Yura Tech Co | Lotte Data vs. Woori Technology | Lotte Data vs. Korea Information Engineering | Lotte Data vs. FNSTech Co |
| JYP Entertainment vs. Daesung Hi Tech Co | JYP Entertainment vs. Shinsegae Food | JYP Entertainment vs. Shinhan Inverse Silver | JYP Entertainment vs. Dongbang Transport Logistics |
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.
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