Correlation Between YG Entertainment and Industrial Bank
Can any of the company-specific risk be diversified away by investing in both YG Entertainment and Industrial Bank 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 YG Entertainment and Industrial Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YG Entertainment and Industrial Bank, you can compare the effects of market volatilities on YG Entertainment and Industrial Bank 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 YG Entertainment with a short position of Industrial Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of YG Entertainment and Industrial Bank.
Diversification Opportunities for YG Entertainment and Industrial Bank
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 122870 and Industrial is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding YG Entertainment and Industrial Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Bank and YG 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 YG Entertainment are associated (or correlated) with Industrial Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Bank has no effect on the direction of YG Entertainment i.e., YG Entertainment and Industrial Bank go up and down completely randomly.
Pair Corralation between YG Entertainment and Industrial Bank
Assuming the 90 days trading horizon YG Entertainment is expected to under-perform the Industrial Bank. In addition to that, YG Entertainment is 1.54 times more volatile than Industrial Bank. It trades about -0.09 of its total potential returns per unit of risk. Industrial Bank is currently generating about -0.01 per unit of volatility. If you would invest 1,465,000 in Industrial Bank on September 25, 2024 and sell it today you would lose (9,000) from holding Industrial Bank or give up 0.61% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
YG Entertainment vs. Industrial Bank
Performance |
Timeline |
YG Entertainment |
Industrial Bank |
YG Entertainment and Industrial Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with YG Entertainment and Industrial Bank
The main advantage of trading using opposite YG Entertainment and Industrial Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YG Entertainment position performs unexpectedly, Industrial Bank 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 Industrial Bank will offset losses from the drop in Industrial Bank's long position.YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. Samsung Electronics Co | YG Entertainment vs. LG Energy Solution | YG Entertainment vs. SK Hynix |
Industrial Bank vs. Mirai Semiconductors Co | Industrial Bank vs. Jeju Semiconductor Corp | Industrial Bank vs. YG Entertainment | Industrial Bank vs. Eagle Veterinary Technology |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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