Correlation Between JYP Entertainment and Asia Technology
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Asia Technology 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 JYP Entertainment and Asia Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment Corp and Asia Technology Co, you can compare the effects of market volatilities on JYP Entertainment and Asia Technology 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 JYP Entertainment with a short position of Asia Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Asia Technology.
Diversification Opportunities for JYP Entertainment and Asia Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between JYP and Asia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and Asia Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Technology and JYP 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 JYP Entertainment Corp are associated (or correlated) with Asia Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Technology has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Asia Technology go up and down completely randomly.
Pair Corralation between JYP Entertainment and Asia Technology
Assuming the 90 days trading horizon JYP Entertainment Corp is expected to under-perform the Asia Technology. In addition to that, JYP Entertainment is 2.97 times more volatile than Asia Technology Co. It trades about -0.07 of its total potential returns per unit of risk. Asia Technology Co is currently generating about -0.11 per unit of volatility. If you would invest 210,000 in Asia Technology Co on December 21, 2024 and sell it today you would lose (13,500) from holding Asia Technology Co or give up 6.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JYP Entertainment Corp vs. Asia Technology Co
Performance |
Timeline |
JYP Entertainment Corp |
Asia Technology |
JYP Entertainment and Asia Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JYP Entertainment and Asia Technology
The main advantage of trading using opposite JYP Entertainment and Asia Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Asia Technology 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 Asia Technology will offset losses from the drop in Asia Technology's long position.JYP Entertainment vs. Nable Communications | JYP Entertainment vs. Kaonmedia Co | JYP Entertainment vs. Mobileleader CoLtd | JYP Entertainment vs. Pan Entertainment Co |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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