Correlation Between CJ Seafood and FoodNamoo
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and FoodNamoo 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 FoodNamoo 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 FoodNamoo, you can compare the effects of market volatilities on CJ Seafood and FoodNamoo 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 FoodNamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and FoodNamoo.
Diversification Opportunities for CJ Seafood and FoodNamoo
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011150 and FoodNamoo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and FoodNamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FoodNamoo 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 FoodNamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FoodNamoo has no effect on the direction of CJ Seafood i.e., CJ Seafood and FoodNamoo go up and down completely randomly.
Pair Corralation between CJ Seafood and FoodNamoo
Assuming the 90 days trading horizon CJ Seafood Corp is expected to under-perform the FoodNamoo. But the stock apears to be less risky and, when comparing its historical volatility, CJ Seafood Corp is 1.45 times less risky than FoodNamoo. The stock trades about -0.11 of its potential returns per unit of risk. The FoodNamoo is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 352,500 in FoodNamoo on September 13, 2024 and sell it today you would lose (20,500) from holding FoodNamoo or give up 5.82% 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. FoodNamoo
Performance |
| Timeline |
| CJ Seafood Corp |
| FoodNamoo |
CJ Seafood and FoodNamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and FoodNamoo
The main advantage of trading using opposite CJ Seafood and FoodNamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, FoodNamoo 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 FoodNamoo will offset losses from the drop in FoodNamoo'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 |
| FoodNamoo vs. Maeil Dairies Co | FoodNamoo vs. HYUNDAI FEED | FoodNamoo vs. Neo Cremar Co | FoodNamoo vs. Dongwoo Farm To |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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