Correlation Between Hanwha Solutions and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Hanwha Solutions 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 Hanwha Solutions and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanwha Solutions and CJ Seafood Corp, you can compare the effects of market volatilities on Hanwha Solutions 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 Hanwha Solutions with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanwha Solutions and CJ Seafood.
Diversification Opportunities for Hanwha Solutions and CJ Seafood
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hanwha and 011155 is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hanwha Solutions 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 Hanwha Solutions 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 Hanwha Solutions 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 Hanwha Solutions i.e., Hanwha Solutions and CJ Seafood go up and down completely randomly.
Pair Corralation between Hanwha Solutions and CJ Seafood
Assuming the 90 days trading horizon Hanwha Solutions is expected to under-perform the CJ Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Hanwha Solutions is 1.74 times less risky than CJ Seafood. The stock trades about -0.07 of its potential returns per unit of risk. The CJ Seafood Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,753,000 in CJ Seafood Corp on September 13, 2024 and sell it today you would earn a total of 57,000 from holding CJ Seafood Corp or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanwha Solutions vs. CJ Seafood Corp
Performance |
| Timeline |
| Hanwha Solutions |
| CJ Seafood Corp |
Hanwha Solutions and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanwha Solutions and CJ Seafood
The main advantage of trading using opposite Hanwha Solutions and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanwha Solutions 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.| Hanwha Solutions vs. LG Chemicals | Hanwha Solutions vs. POSCO Holdings | Hanwha Solutions vs. Lotte Chemical Corp | Hanwha Solutions vs. Hyundai Steel |
| CJ Seafood vs. Guyoung Technology Co | CJ Seafood vs. Polaris Office Corp | CJ Seafood vs. AeroSpace Technology of | CJ Seafood vs. Eugene Technology CoLtd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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