Correlation Between Dongbu Insurance and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Dongbu Insurance and CJ Seafood 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 Dongbu Insurance and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbu Insurance Co and CJ Seafood Corp, you can compare the effects of market volatilities on Dongbu Insurance and CJ Seafood 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 Dongbu Insurance with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbu Insurance and CJ Seafood.
Diversification Opportunities for Dongbu Insurance and CJ Seafood
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongbu and 011150 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dongbu Insurance Co and CJ Seafood Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ Seafood Corp and Dongbu Insurance 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 Dongbu Insurance Co are associated (or correlated) with CJ Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ Seafood Corp has no effect on the direction of Dongbu Insurance i.e., Dongbu Insurance and CJ Seafood go up and down completely randomly.
Pair Corralation between Dongbu Insurance and CJ Seafood
Assuming the 90 days trading horizon Dongbu Insurance Co is expected to generate 0.75 times more return on investment than CJ Seafood. However, Dongbu Insurance Co is 1.33 times less risky than CJ Seafood. It trades about 0.07 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.02 per unit of risk. If you would invest 5,530,845 in Dongbu Insurance Co on September 2, 2024 and sell it today you would earn a total of 5,389,155 from holding Dongbu Insurance Co or generate 97.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbu Insurance Co vs. CJ Seafood Corp
Performance |
| Timeline |
| Dongbu Insurance |
| CJ Seafood Corp |
Dongbu Insurance and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbu Insurance and CJ Seafood
The main advantage of trading using opposite Dongbu Insurance and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbu Insurance position performs unexpectedly, CJ Seafood 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 Seafood will offset losses from the drop in CJ Seafood's long position.| Dongbu Insurance vs. AptaBio Therapeutics | Dongbu Insurance vs. Daewoo SBI SPAC | Dongbu Insurance vs. Dream Security co | Dongbu Insurance vs. Microfriend |
| CJ Seafood vs. AptaBio Therapeutics | CJ Seafood vs. Daewoo SBI SPAC | CJ Seafood vs. Dream Security co | CJ Seafood vs. Microfriend |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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