Correlation Between Taekwang Ind and CJ Cheiljedang
Can any of the company-specific risk be diversified away by investing in both Taekwang Ind and CJ Cheiljedang 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 Taekwang Ind and CJ Cheiljedang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taekwang Ind and CJ Cheiljedang, you can compare the effects of market volatilities on Taekwang Ind and CJ Cheiljedang 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 Taekwang Ind with a short position of CJ Cheiljedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taekwang Ind and CJ Cheiljedang.
Diversification Opportunities for Taekwang Ind and CJ Cheiljedang
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Taekwang and 097950 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Taekwang Ind and CJ Cheiljedang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ Cheiljedang and Taekwang Ind 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 Taekwang Ind are associated (or correlated) with CJ Cheiljedang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ Cheiljedang has no effect on the direction of Taekwang Ind i.e., Taekwang Ind and CJ Cheiljedang go up and down completely randomly.
Pair Corralation between Taekwang Ind and CJ Cheiljedang
Assuming the 90 days trading horizon Taekwang Ind is expected to generate 0.88 times more return on investment than CJ Cheiljedang. However, Taekwang Ind is 1.14 times less risky than CJ Cheiljedang. It trades about -0.01 of its potential returns per unit of risk. CJ Cheiljedang is currently generating about -0.09 per unit of risk. If you would invest 65,400,000 in Taekwang Ind on September 2, 2024 and sell it today you would lose (3,000,000) from holding Taekwang Ind or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taekwang Ind vs. CJ Cheiljedang
Performance |
| Timeline |
| Taekwang Ind |
| CJ Cheiljedang |
Taekwang Ind and CJ Cheiljedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taekwang Ind and CJ Cheiljedang
The main advantage of trading using opposite Taekwang Ind and CJ Cheiljedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taekwang Ind position performs unexpectedly, CJ Cheiljedang 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 CJ Cheiljedang will offset losses from the drop in CJ Cheiljedang's long position.| Taekwang Ind vs. Lotte Non Life Insurance | Taekwang Ind vs. Woori Technology | Taekwang Ind vs. Hanjin Transportation Co | Taekwang Ind vs. Korean Reinsurance Co |
| CJ Cheiljedang vs. Green Cross Medical | CJ Cheiljedang vs. Handok Clean Tech | CJ Cheiljedang vs. Polaris Office Corp | CJ Cheiljedang vs. Daishin Information Communications |
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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