Correlation Between CJ Seafood and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Haitai Confectionery 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 Haitai Confectionery 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 Haitai Confectionery Foods, you can compare the effects of market volatilities on CJ Seafood and Haitai Confectionery 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 Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Haitai Confectionery.
Diversification Opportunities for CJ Seafood and Haitai Confectionery
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between 011150 and Haitai is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery 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 Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of CJ Seafood i.e., CJ Seafood and Haitai Confectionery go up and down completely randomly.
Pair Corralation between CJ Seafood and Haitai Confectionery
Assuming the 90 days trading horizon CJ Seafood Corp is expected to under-perform the Haitai Confectionery. But the stock apears to be less risky and, when comparing its historical volatility, CJ Seafood Corp is 1.19 times less risky than Haitai Confectionery. The stock trades about -0.11 of its potential returns per unit of risk. The Haitai Confectionery Foods is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 589,000 in Haitai Confectionery Foods on September 13, 2024 and sell it today you would earn a total of 22,000 from holding Haitai Confectionery Foods or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Haitai Confectionery Foods
Performance |
| Timeline |
| CJ Seafood Corp |
| Haitai Confectionery |
CJ Seafood and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Haitai Confectionery
The main advantage of trading using opposite CJ Seafood and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery'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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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