Correlation Between CJ Seafood and Jeju Air
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Jeju Air 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 Jeju Air 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 Jeju Air Co, you can compare the effects of market volatilities on CJ Seafood and Jeju Air 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 Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Jeju Air.
Diversification Opportunities for CJ Seafood and Jeju Air
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between 011150 and Jeju is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air 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 Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of CJ Seafood i.e., CJ Seafood and Jeju Air go up and down completely randomly.
Pair Corralation between CJ Seafood and Jeju Air
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 0.86 times more return on investment than Jeju Air. However, CJ Seafood Corp is 1.16 times less risky than Jeju Air. It trades about 0.09 of its potential returns per unit of risk. Jeju Air Co is currently generating about 0.0 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Jeju Air Co
Performance |
| Timeline |
| CJ Seafood Corp |
| Jeju Air |
CJ Seafood and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Jeju Air
The main advantage of trading using opposite CJ Seafood and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Jeju Air 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 Jeju Air will offset losses from the drop in Jeju Air'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 |
| Jeju Air vs. Korea New Network | Jeju Air vs. Solution Advanced Technology | Jeju Air vs. Busan Industrial Co | Jeju Air 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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