Correlation Between CJ Seafood and Seoam Machinery
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Seoam Machinery 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 Seoam Machinery 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 Seoam Machinery Industry, you can compare the effects of market volatilities on CJ Seafood and Seoam Machinery 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 Seoam Machinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Seoam Machinery.
Diversification Opportunities for CJ Seafood and Seoam Machinery
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 011150 and Seoam is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Seoam Machinery Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoam Machinery Industry 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 Seoam Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoam Machinery Industry has no effect on the direction of CJ Seafood i.e., CJ Seafood and Seoam Machinery go up and down completely randomly.
Pair Corralation between CJ Seafood and Seoam Machinery
Assuming the 90 days trading horizon CJ Seafood is expected to generate 1.56 times less return on investment than Seoam Machinery. In addition to that, CJ Seafood is 1.97 times more volatile than Seoam Machinery Industry. It trades about 0.11 of its total potential returns per unit of risk. Seoam Machinery Industry is currently generating about 0.33 per unit of volatility. If you would invest 337,152 in Seoam Machinery Industry on October 11, 2024 and sell it today you would earn a total of 42,348 from holding Seoam Machinery Industry or generate 12.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Seoam Machinery Industry
Performance |
| Timeline |
| CJ Seafood Corp |
| Seoam Machinery Industry |
CJ Seafood and Seoam Machinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Seoam Machinery
The main advantage of trading using opposite CJ Seafood and Seoam Machinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Seoam Machinery 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 Seoam Machinery will offset losses from the drop in Seoam Machinery's long position.| CJ Seafood vs. Daou Technology | CJ Seafood vs. Nam Hwa Construction | CJ Seafood vs. Keyang Electric Machinery | CJ Seafood vs. Semyung Electric Machinery |
| Seoam Machinery vs. Homecast CoLtd | Seoam Machinery vs. CJ Seafood Corp | Seoam Machinery vs. KT Submarine Telecom | Seoam Machinery vs. Samlip General Foods |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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