Correlation Between JYP Entertainment and GemVaxKAEL CoLtd
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and GemVaxKAEL CoLtd, you can compare the effects of market volatilities on JYP Entertainment and GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and GemVaxKAEL CoLtd.
Diversification Opportunities for JYP Entertainment and GemVaxKAEL CoLtd
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JYP and GemVaxKAEL is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and GemVaxKAEL CoLtd go up and down completely randomly.
Pair Corralation between JYP Entertainment and GemVaxKAEL CoLtd
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 2.1 times less return on investment than GemVaxKAEL CoLtd. But when comparing it to its historical volatility, JYP Entertainment is 1.19 times less risky than GemVaxKAEL CoLtd. It trades about 0.02 of its potential returns per unit of risk. GemVaxKAEL CoLtd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,130,000 in GemVaxKAEL CoLtd on September 26, 2024 and sell it today you would earn a total of 339,000 from holding GemVaxKAEL CoLtd or generate 30.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JYP Entertainment vs. GemVaxKAEL CoLtd
Performance |
Timeline |
JYP Entertainment |
GemVaxKAEL CoLtd |
JYP Entertainment and GemVaxKAEL CoLtd Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JYP Entertainment and GemVaxKAEL CoLtd
The main advantage of trading using opposite JYP Entertainment and GemVaxKAEL CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd will offset losses from the drop in GemVaxKAEL CoLtd's long position.JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
GemVaxKAEL CoLtd vs. Dongsin Engineering Construction | GemVaxKAEL CoLtd vs. Doosan Fuel Cell | GemVaxKAEL CoLtd vs. Daishin Balance 1 | GemVaxKAEL CoLtd vs. Total Soft Bank |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |