Correlation Between CJ Seafood and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Shinsegae Food 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 Shinsegae Food 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 Shinsegae Food, you can compare the effects of market volatilities on CJ Seafood and Shinsegae Food 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 Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Shinsegae Food.
Diversification Opportunities for CJ Seafood and Shinsegae Food
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 011150 and Shinsegae is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food 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 Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of CJ Seafood i.e., CJ Seafood and Shinsegae Food go up and down completely randomly.
Pair Corralation between CJ Seafood and Shinsegae Food
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 1.12 times more return on investment than Shinsegae Food. However, CJ Seafood is 1.12 times more volatile than Shinsegae Food. It trades about 0.09 of its potential returns per unit of risk. Shinsegae Food is currently generating about -0.07 per unit of risk. If you would invest 279,000 in CJ Seafood Corp on September 14, 2024 and sell it today you would earn a total of 11,000 from holding CJ Seafood Corp or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Shinsegae Food
Performance |
| Timeline |
| CJ Seafood Corp |
| Shinsegae Food |
CJ Seafood and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Shinsegae Food
The main advantage of trading using opposite CJ Seafood and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Shinsegae Food 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 Shinsegae Food will offset losses from the drop in Shinsegae Food's long position.| CJ Seafood vs. Samsung Electronics Co | CJ Seafood vs. Samsung Electronics Co | CJ Seafood vs. SK Hynix | CJ Seafood vs. POSCO Holdings |
| Shinsegae Food vs. Daou Data Corp | Shinsegae Food vs. Solution Advanced Technology | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. Busan Ind |
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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