Correlation Between CJ Seafood and Eagle Veterinary
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Eagle Veterinary 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 Eagle Veterinary 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 Eagle Veterinary Technology, you can compare the effects of market volatilities on CJ Seafood and Eagle Veterinary 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 Eagle Veterinary. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Eagle Veterinary.
Diversification Opportunities for CJ Seafood and Eagle Veterinary
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011150 and Eagle is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Eagle Veterinary Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Veterinary Tec 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 Eagle Veterinary. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Veterinary Tec has no effect on the direction of CJ Seafood i.e., CJ Seafood and Eagle Veterinary go up and down completely randomly.
Pair Corralation between CJ Seafood and Eagle Veterinary
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 2.05 times more return on investment than Eagle Veterinary. However, CJ Seafood is 2.05 times more volatile than Eagle Veterinary Technology. It trades about 0.02 of its potential returns per unit of risk. Eagle Veterinary Technology is currently generating about -0.03 per unit of risk. If you would invest 296,500 in CJ Seafood Corp on September 12, 2024 and sell it today you would lose (5,000) from holding CJ Seafood Corp or give up 1.69% 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. Eagle Veterinary Technology
Performance |
| Timeline |
| CJ Seafood Corp |
| Eagle Veterinary Tec |
CJ Seafood and Eagle Veterinary Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Eagle Veterinary
The main advantage of trading using opposite CJ Seafood and Eagle Veterinary positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Eagle Veterinary 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 Eagle Veterinary will offset losses from the drop in Eagle Veterinary'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 |
| Eagle Veterinary vs. LS Materials | Eagle Veterinary vs. WONIK Materials CoLtd | Eagle Veterinary vs. Jeju Beer Co | Eagle Veterinary vs. National Plastic 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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