Correlation Between JYP Entertainment and Taewoong Logistics
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Taewoong Logistics 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 Taewoong Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Taewoong Logistics CoLtd, you can compare the effects of market volatilities on JYP Entertainment and Taewoong Logistics 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 Taewoong Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Taewoong Logistics.
Diversification Opportunities for JYP Entertainment and Taewoong Logistics
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between JYP and Taewoong is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Taewoong Logistics CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taewoong Logistics 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 Taewoong Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taewoong Logistics CoLtd has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Taewoong Logistics go up and down completely randomly.
Pair Corralation between JYP Entertainment and Taewoong Logistics
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 1.07 times more return on investment than Taewoong Logistics. However, JYP Entertainment is 1.07 times more volatile than Taewoong Logistics CoLtd. It trades about 0.02 of its potential returns per unit of risk. Taewoong Logistics CoLtd is currently generating about -0.01 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 Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
JYP Entertainment vs. Taewoong Logistics CoLtd
Performance |
Timeline |
JYP Entertainment |
Taewoong Logistics CoLtd |
JYP Entertainment and Taewoong Logistics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JYP Entertainment and Taewoong Logistics
The main advantage of trading using opposite JYP Entertainment and Taewoong Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Taewoong Logistics 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 Taewoong Logistics will offset losses from the drop in Taewoong Logistics' long position.JYP Entertainment vs. YG Entertainment | JYP Entertainment vs. SM Entertainment Co | JYP Entertainment vs. Cube Entertainment |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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