Correlation Between CJ Seafood and Korea Refractories
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Korea Refractories 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 CJ Seafood and Korea Refractories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ Seafood Corp and Korea Refractories Co, you can compare the effects of market volatilities on CJ Seafood and Korea Refractories 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 CJ Seafood with a short position of Korea Refractories. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Korea Refractories.
Diversification Opportunities for CJ Seafood and Korea Refractories
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011150 and Korea is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Korea Refractories Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refractories and CJ Seafood 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 CJ Seafood Corp are associated (or correlated) with Korea Refractories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refractories has no effect on the direction of CJ Seafood i.e., CJ Seafood and Korea Refractories go up and down completely randomly.
Pair Corralation between CJ Seafood and Korea Refractories
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 2.21 times more return on investment than Korea Refractories. However, CJ Seafood is 2.21 times more volatile than Korea Refractories Co. It trades about -0.05 of its potential returns per unit of risk. Korea Refractories Co is currently generating about -0.12 per unit of risk. If you would invest 410,000 in CJ Seafood Corp on September 3, 2024 and sell it today you would lose (126,500) from holding CJ Seafood Corp or give up 30.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Korea Refractories Co
Performance |
| Timeline |
| CJ Seafood Corp |
| Korea Refractories |
CJ Seafood and Korea Refractories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Korea Refractories
The main advantage of trading using opposite CJ Seafood and Korea Refractories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Korea Refractories 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 Korea Refractories will offset losses from the drop in Korea Refractories' long position.| CJ Seafood vs. AptaBio Therapeutics | CJ Seafood vs. Daewoo SBI SPAC | CJ Seafood vs. Dream Security co | CJ Seafood vs. Microfriend |
| Korea Refractories vs. Eagon Industrial Co | Korea Refractories vs. Shinhan Financial Group | Korea Refractories vs. Korean Reinsurance Co | Korea Refractories vs. Seoul Food Industrial |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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