Correlation Between CJ Seafood and Nasmedia
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Nasmedia 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 Nasmedia 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 Nasmedia Co, you can compare the effects of market volatilities on CJ Seafood and Nasmedia 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 Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Nasmedia.
Diversification Opportunities for CJ Seafood and Nasmedia
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011150 and Nasmedia is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of CJ Seafood i.e., CJ Seafood and Nasmedia go up and down completely randomly.
Pair Corralation between CJ Seafood and Nasmedia
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 1.73 times more return on investment than Nasmedia. However, CJ Seafood is 1.73 times more volatile than Nasmedia Co. It trades about 0.05 of its potential returns per unit of risk. Nasmedia Co is currently generating about 0.04 per unit of risk. If you would invest 295,000 in CJ Seafood Corp on November 3, 2024 and sell it today you would earn a total of 3,500 from holding CJ Seafood Corp or generate 1.19% 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. Nasmedia Co
Performance |
| Timeline |
| CJ Seafood Corp |
| Nasmedia |
CJ Seafood and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Nasmedia
The main advantage of trading using opposite CJ Seafood and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia's long position.| CJ Seafood vs. DoubleU Games Co | CJ Seafood vs. ABOV Semiconductor Co | CJ Seafood vs. Seoul Food Industrial | CJ Seafood vs. Foodnamoo |
| Nasmedia vs. Asiana Airlines | Nasmedia vs. Hanjoo Light Metal | Nasmedia vs. Korean Reinsurance Co | Nasmedia vs. Youngsin Metal Industrial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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