Correlation Between CJ Seafood and BIT Computer
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and BIT Computer 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 BIT Computer 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 BIT Computer Co, you can compare the effects of market volatilities on CJ Seafood and BIT Computer 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 BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and BIT Computer.
Diversification Opportunities for CJ Seafood and BIT Computer
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 011150 and BIT is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer 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 BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of CJ Seafood i.e., CJ Seafood and BIT Computer go up and down completely randomly.
Pair Corralation between CJ Seafood and BIT Computer
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 1.61 times more return on investment than BIT Computer. However, CJ Seafood is 1.61 times more volatile than BIT Computer Co. It trades about 0.02 of its potential returns per unit of risk. BIT Computer Co is currently generating about -0.14 per unit of risk. If you would invest 300,500 in CJ Seafood Corp on November 7, 2024 and sell it today you would earn a total of 1,500 from holding CJ Seafood Corp or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. BIT Computer Co
Performance |
| Timeline |
| CJ Seafood Corp |
| BIT Computer |
CJ Seafood and BIT Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and BIT Computer
The main advantage of trading using opposite CJ Seafood and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.| CJ Seafood vs. Digital Power Communications | CJ Seafood vs. Lotte Data Communication | CJ Seafood vs. Korea Shipbuilding Offshore | CJ Seafood vs. LG Display Co |
| BIT Computer vs. Samsung Life Insurance | BIT Computer vs. Haitai Confectionery Foods | BIT Computer vs. CJ Seafood Corp | BIT Computer vs. Pureun Mutual Savings |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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