Correlation Between JYP Entertainment and Zinus
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Zinus 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 Zinus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Zinus Inc, you can compare the effects of market volatilities on JYP Entertainment and Zinus 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 Zinus. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Zinus.
Diversification Opportunities for JYP Entertainment and Zinus
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JYP and Zinus is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Zinus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zinus Inc 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 are associated (or correlated) with Zinus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zinus Inc has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Zinus go up and down completely randomly.
Pair Corralation between JYP Entertainment and Zinus
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 0.98 times more return on investment than Zinus. However, JYP Entertainment is 1.02 times less risky than Zinus. It trades about 0.02 of its potential returns per unit of risk. Zinus Inc is currently generating about 0.0 per unit of risk. If you would invest 6,435,775 in JYP Entertainment on September 26, 2024 and sell it today you would earn a total of 394,225 from holding JYP Entertainment or generate 6.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
JYP Entertainment vs. Zinus Inc
Performance |
Timeline |
JYP Entertainment |
Zinus Inc |
JYP Entertainment and Zinus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JYP Entertainment and Zinus
The main advantage of trading using opposite JYP Entertainment and Zinus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Zinus 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 Zinus will offset losses from the drop in Zinus' long position.JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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