Correlation Between CJ Seafood and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Phoenix Materials 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 Phoenix Materials 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 Phoenix Materials Co, you can compare the effects of market volatilities on CJ Seafood and Phoenix Materials 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 Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Phoenix Materials.
Diversification Opportunities for CJ Seafood and Phoenix Materials
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011155 and Phoenix is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials 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 Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of CJ Seafood i.e., CJ Seafood and Phoenix Materials go up and down completely randomly.
Pair Corralation between CJ Seafood and Phoenix Materials
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 0.96 times more return on investment than Phoenix Materials. However, CJ Seafood Corp is 1.04 times less risky than Phoenix Materials. It trades about 0.02 of its potential returns per unit of risk. Phoenix Materials Co is currently generating about -0.03 per unit of risk. If you would invest 2,010,000 in CJ Seafood Corp on September 12, 2024 and sell it today you would lose (77,000) from holding CJ Seafood Corp or give up 3.83% 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. Phoenix Materials Co
Performance |
| Timeline |
| CJ Seafood Corp |
| Phoenix Materials |
CJ Seafood and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Phoenix Materials
The main advantage of trading using opposite CJ Seafood and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' 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 |
| Phoenix Materials vs. Organic Special Pet | Phoenix Materials vs. Infinitt Healthcare Co | Phoenix Materials vs. CKH Food Health | Phoenix Materials vs. CJ Seafood Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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