Correlation Between JYP Entertainment and WOOJUNG BIO
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and WOOJUNG BIO 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 WOOJUNG BIO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and WOOJUNG BIO, you can compare the effects of market volatilities on JYP Entertainment and WOOJUNG BIO 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 WOOJUNG BIO. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and WOOJUNG BIO.
Diversification Opportunities for JYP Entertainment and WOOJUNG BIO
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between JYP and WOOJUNG is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and WOOJUNG BIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOOJUNG BIO 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 WOOJUNG BIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOOJUNG BIO has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and WOOJUNG BIO go up and down completely randomly.
Pair Corralation between JYP Entertainment and WOOJUNG BIO
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 0.63 times more return on investment than WOOJUNG BIO. However, JYP Entertainment is 1.6 times less risky than WOOJUNG BIO. It trades about 0.02 of its potential returns per unit of risk. WOOJUNG BIO is currently generating about 0.0 per unit of risk. If you would invest 6,774,500 in JYP Entertainment on September 24, 2024 and sell it today you would earn a total of 225,500 from holding JYP Entertainment or generate 3.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
JYP Entertainment vs. WOOJUNG BIO
Performance |
Timeline |
JYP Entertainment |
WOOJUNG BIO |
JYP Entertainment and WOOJUNG BIO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JYP Entertainment and WOOJUNG BIO
The main advantage of trading using opposite JYP Entertainment and WOOJUNG BIO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, WOOJUNG BIO 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 WOOJUNG BIO will offset losses from the drop in WOOJUNG BIO's long position.JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. Samsung Electronics Co | JYP Entertainment vs. KB Financial Group | JYP Entertainment vs. Shinhan Financial Group |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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