Correlation Between JYP Entertainment and Aurora World
Can any of the company-specific risk be diversified away by investing in both JYP Entertainment and Aurora World 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 Aurora World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JYP Entertainment and Aurora World, you can compare the effects of market volatilities on JYP Entertainment and Aurora World 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 Aurora World. Check out your portfolio center. Please also check ongoing floating volatility patterns of JYP Entertainment and Aurora World.
Diversification Opportunities for JYP Entertainment and Aurora World
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JYP and Aurora is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding JYP Entertainment and Aurora World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora World 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 Aurora World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora World has no effect on the direction of JYP Entertainment i.e., JYP Entertainment and Aurora World go up and down completely randomly.
Pair Corralation between JYP Entertainment and Aurora World
Assuming the 90 days trading horizon JYP Entertainment is expected to generate 1.61 times more return on investment than Aurora World. However, JYP Entertainment is 1.61 times more volatile than Aurora World. It trades about 0.21 of its potential returns per unit of risk. Aurora World is currently generating about 0.13 per unit of risk. If you would invest 4,855,000 in JYP Entertainment on September 24, 2024 and sell it today you would earn a total of 2,145,000 from holding JYP Entertainment or generate 44.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
JYP Entertainment vs. Aurora World
Performance |
Timeline |
JYP Entertainment |
Aurora World |
JYP Entertainment and Aurora World Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with JYP Entertainment and Aurora World
The main advantage of trading using opposite JYP Entertainment and Aurora World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JYP Entertainment position performs unexpectedly, Aurora World 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 Aurora World will offset losses from the drop in Aurora World'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 |
Aurora World vs. Woori Technology Investment | Aurora World vs. Samsung Card Co | Aurora World vs. Korea Real Estate | Aurora World vs. CHOROKBAEM PANY Co |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |