Correlation Between JYP Entertainment and E Investment

Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and E Investment 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 E Investment 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 E Investment Development, you can compare the effects of market volatilities on JYP Entertainment and E Investment 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 E Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and E Investment.

Diversification Opportunities for JYP Entertainment and E Investment

0.0

Correlation Coefficient

JYP Entertainment  E Investment

Pay attention - limited upside

The 3 months correlation between JYP and 093230 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment Corp and E Investment Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Investment Development 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 E Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Investment Development has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and E Investment go up and down completely randomly.

Pair Corralation between JYP Entertainment and E Investment

If you would invest  139,200  in E Investment Development on December 23, 2024 and sell it today you would earn a total of  0.00  from holding E Investment Development or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

JYP Entertainment Corp  vs.  E Investment Development

JYP Entertainment Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days JYP Entertainment Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

E Investment Development

Risk-Adjusted Performance

Very Weak

Over the last 90 days E Investment Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, E Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with JYP Entertainment and E Investment

The main advantage of trading using opposite JYP Entertainment and E Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, E Investment 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 E Investment will offset losses from the drop in E Investment's long position.

The idea behind JYP Entertainment Corp and E Investment Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.