Correlation Between CJ Seafood and Hanjoo Light
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Hanjoo Light 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 Hanjoo Light 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 Hanjoo Light Metal, you can compare the effects of market volatilities on CJ Seafood and Hanjoo Light 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 Hanjoo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Hanjoo Light.
Diversification Opportunities for CJ Seafood and Hanjoo Light
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011150 and Hanjoo is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Hanjoo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjoo Light Metal 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 Hanjoo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjoo Light Metal has no effect on the direction of CJ Seafood i.e., CJ Seafood and Hanjoo Light go up and down completely randomly.
Pair Corralation between CJ Seafood and Hanjoo Light
Assuming the 90 days trading horizon CJ Seafood Corp is expected to under-perform the Hanjoo Light. In addition to that, CJ Seafood is 1.69 times more volatile than Hanjoo Light Metal. It trades about -0.03 of its total potential returns per unit of risk. Hanjoo Light Metal is currently generating about -0.03 per unit of volatility. If you would invest 78,600 in Hanjoo Light Metal on October 16, 2024 and sell it today you would lose (1,200) from holding Hanjoo Light Metal or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Hanjoo Light Metal
Performance |
| Timeline |
| CJ Seafood Corp |
| Hanjoo Light Metal |
CJ Seafood and Hanjoo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Hanjoo Light
The main advantage of trading using opposite CJ Seafood and Hanjoo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Hanjoo Light 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 Hanjoo Light will offset losses from the drop in Hanjoo Light's long position.| CJ Seafood vs. CKH Food Health | CJ Seafood vs. Choil Aluminum | CJ Seafood vs. Duksan Hi Metal | CJ Seafood vs. BIT Computer Co |
| Hanjoo Light vs. Samyung Trading Co | Hanjoo Light vs. Lotte Rental Co | Hanjoo Light vs. Hyundai Green Food | Hanjoo Light vs. KTB Investment Securities |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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