Correlation Between CJ Seafood and Kumho Ind
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Kumho Ind 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 Kumho Ind 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 Kumho Ind, you can compare the effects of market volatilities on CJ Seafood and Kumho Ind 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 Kumho Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Kumho Ind.
Diversification Opportunities for CJ Seafood and Kumho Ind
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 011155 and Kumho is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Kumho Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kumho Ind 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 Kumho Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kumho Ind has no effect on the direction of CJ Seafood i.e., CJ Seafood and Kumho Ind go up and down completely randomly.
Pair Corralation between CJ Seafood and Kumho Ind
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 1.37 times more return on investment than Kumho Ind. However, CJ Seafood is 1.37 times more volatile than Kumho Ind. It trades about -0.05 of its potential returns per unit of risk. Kumho Ind is currently generating about -0.09 per unit of risk. If you would invest 2,490,000 in CJ Seafood Corp on September 12, 2024 and sell it today you would lose (557,000) from holding CJ Seafood Corp or give up 22.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Kumho Ind
Performance |
| Timeline |
| CJ Seafood Corp |
| Kumho Ind |
CJ Seafood and Kumho Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Kumho Ind
The main advantage of trading using opposite CJ Seafood and Kumho Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Kumho Ind 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 Kumho Ind will offset losses from the drop in Kumho Ind's long position.| CJ Seafood vs. CJ CheilJedang Corp | CJ Seafood vs. Solution Advanced Technology | CJ Seafood vs. Busan Industrial Co | CJ Seafood vs. Busan Ind |
| Kumho Ind vs. CKH Food Health | Kumho Ind vs. Samyang Foods Co | Kumho Ind vs. Shinsung Delta Tech | Kumho Ind vs. Seoul Food Industrial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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