Correlation Between CJ Seafood and Formetal
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Formetal 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 Formetal 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 Formetal Co, you can compare the effects of market volatilities on CJ Seafood and Formetal 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 Formetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Formetal.
Diversification Opportunities for CJ Seafood and Formetal
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 011155 and Formetal is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Formetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formetal 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 Formetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formetal has no effect on the direction of CJ Seafood i.e., CJ Seafood and Formetal go up and down completely randomly.
Pair Corralation between CJ Seafood and Formetal
Assuming the 90 days trading horizon CJ Seafood Corp is expected to under-perform the Formetal. In addition to that, CJ Seafood is 1.24 times more volatile than Formetal Co. It trades about -0.07 of its total potential returns per unit of risk. Formetal Co is currently generating about -0.07 per unit of volatility. If you would invest 356,582 in Formetal Co on September 3, 2024 and sell it today you would lose (105,582) from holding Formetal Co or give up 29.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Seafood Corp vs. Formetal Co
Performance |
| Timeline |
| CJ Seafood Corp |
| Formetal |
CJ Seafood and Formetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Seafood and Formetal
The main advantage of trading using opposite CJ Seafood and Formetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Formetal 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 Formetal will offset losses from the drop in Formetal's long position.| CJ Seafood vs. Korea Computer | CJ Seafood vs. Dongbang Transport Logistics | CJ Seafood vs. Hanjin Transportation Co | CJ Seafood vs. Inzi Display CoLtd |
| Formetal vs. COWINTECH Co | Formetal vs. CS BEARING CoLtd | Formetal vs. Young Poong Precision | Formetal vs. DAEMO Engineering 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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