Correlation Between CJ Seafood and Genie Music
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Genie Music 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 Genie Music 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 Genie Music, you can compare the effects of market volatilities on CJ Seafood and Genie Music 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 Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Genie Music.
Diversification Opportunities for CJ Seafood and Genie Music
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011150 and Genie is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music 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 Genie Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genie Music has no effect on the direction of CJ Seafood i.e., CJ Seafood and Genie Music go up and down completely randomly.
Pair Corralation between CJ Seafood and Genie Music
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 0.59 times more return on investment than Genie Music. However, CJ Seafood Corp is 1.71 times less risky than Genie Music. It trades about 0.09 of its potential returns per unit of risk. Genie Music is currently generating about 0.01 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Genie Music
Performance |
| Timeline |
| CJ Seafood Corp |
| Genie Music |
CJ Seafood and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Genie Music
The main advantage of trading using opposite CJ Seafood and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Genie Music 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 Genie Music will offset losses from the drop in Genie Music'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 |
| Genie Music vs. WooDeumGee Farm Co, | Genie Music vs. Dongwoo Farm To | Genie Music vs. SungMoon Electronics Co | Genie Music vs. Cuckoo Electronics Co |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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