Correlation Between CJ Seafood and HANA Micron
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and HANA Micron 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 HANA Micron 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 HANA Micron, you can compare the effects of market volatilities on CJ Seafood and HANA Micron 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 HANA Micron. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and HANA Micron.
Diversification Opportunities for CJ Seafood and HANA Micron
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011155 and HANA is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and HANA Micron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANA Micron 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 HANA Micron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANA Micron has no effect on the direction of CJ Seafood i.e., CJ Seafood and HANA Micron go up and down completely randomly.
Pair Corralation between CJ Seafood and HANA Micron
Assuming the 90 days trading horizon CJ Seafood Corp is expected to generate 0.62 times more return on investment than HANA Micron. However, CJ Seafood Corp is 1.61 times less risky than HANA Micron. It trades about -0.06 of its potential returns per unit of risk. HANA Micron is currently generating about -0.09 per unit of risk. If you would invest 2,400,000 in CJ Seafood Corp on September 4, 2024 and sell it today you would lose (780,000) from holding CJ Seafood Corp or give up 32.5% 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. HANA Micron
Performance |
| Timeline |
| CJ Seafood Corp |
| HANA Micron |
CJ Seafood and HANA Micron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and HANA Micron
The main advantage of trading using opposite CJ Seafood and HANA Micron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, HANA Micron 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 HANA Micron will offset losses from the drop in HANA Micron's long position.| CJ Seafood vs. Lotte Chilsung Beverage | CJ Seafood vs. Innowireless Co | CJ Seafood vs. KEPCO Engineering Construction | CJ Seafood vs. Bohae Brewery |
| HANA Micron vs. FOODWELL Co | HANA Micron vs. Sam Yang Foods | HANA Micron vs. Pureun Mutual Savings | HANA Micron vs. Sempio Foods Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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