Correlation Between CJ Seafood and Korea Information
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Korea Information 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 Information 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 Information Engineering, you can compare the effects of market volatilities on CJ Seafood and Korea Information 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 Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Korea Information.
Diversification Opportunities for CJ Seafood and Korea Information
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 011150 and Korea is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Korea Information Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of CJ Seafood i.e., CJ Seafood and Korea Information go up and down completely randomly.
Pair Corralation between CJ Seafood and Korea Information
Assuming the 90 days trading horizon CJ Seafood Corp is expected to under-perform the Korea Information. In addition to that, CJ Seafood is 1.1 times more volatile than Korea Information Engineering. It trades about -0.04 of its total potential returns per unit of risk. Korea Information Engineering is currently generating about -0.01 per unit of volatility. If you would invest 269,500 in Korea Information Engineering on November 6, 2024 and sell it today you would lose (9,500) from holding Korea Information Engineering or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Korea Information Engineering
Performance |
| Timeline |
| CJ Seafood Corp |
| Korea Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CJ Seafood and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Korea Information
The main advantage of trading using opposite CJ Seafood and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Korea Information 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 Information will offset losses from the drop in Korea Information'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 |
| Korea Information vs. Iljin Display | Korea Information vs. KPX Green Chemical | Korea Information vs. Korea Petro Chemical | Korea Information vs. Miwon Chemical |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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