Correlation Between CJ Seafood and CJ CheilJedang
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and CJ CheilJedang 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 CJ CheilJedang 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 CJ CheilJedang Corp, you can compare the effects of market volatilities on CJ Seafood and CJ CheilJedang 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 CJ CheilJedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and CJ CheilJedang.
Diversification Opportunities for CJ Seafood and CJ CheilJedang
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 011150 and 097955 is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and CJ CheilJedang Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ CheilJedang Corp 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 CJ CheilJedang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ CheilJedang Corp has no effect on the direction of CJ Seafood i.e., CJ Seafood and CJ CheilJedang go up and down completely randomly.
Pair Corralation between CJ Seafood and CJ CheilJedang
Assuming the 90 days trading horizon CJ Seafood is expected to generate 1.25 times less return on investment than CJ CheilJedang. In addition to that, CJ Seafood is 1.25 times more volatile than CJ CheilJedang Corp. It trades about 0.03 of its total potential returns per unit of risk. CJ CheilJedang Corp is currently generating about 0.05 per unit of volatility. If you would invest 12,800,000 in CJ CheilJedang Corp on September 13, 2024 and sell it today you would earn a total of 210,000 from holding CJ CheilJedang Corp or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. CJ CheilJedang Corp
Performance |
| Timeline |
| CJ Seafood Corp |
| CJ CheilJedang Corp |
CJ Seafood and CJ CheilJedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and CJ CheilJedang
The main advantage of trading using opposite CJ Seafood and CJ CheilJedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, CJ CheilJedang 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 CJ CheilJedang will offset losses from the drop in CJ CheilJedang's long position.| CJ Seafood vs. PNC Technologies co | CJ Seafood vs. Shinhan Inverse Silver | CJ Seafood vs. Cots Technology Co | CJ Seafood vs. PH Tech Co |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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