Correlation Between Busan Ind and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Busan Ind and CJ Seafood 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 Busan Ind and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and CJ Seafood Corp, you can compare the effects of market volatilities on Busan Ind and CJ Seafood 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 Busan Ind with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and CJ Seafood.
Diversification Opportunities for Busan Ind and CJ Seafood
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Busan and 011150 is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and CJ Seafood Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ Seafood Corp and Busan Ind 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 Busan Ind are associated (or correlated) with CJ Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ Seafood Corp has no effect on the direction of Busan Ind i.e., Busan Ind and CJ Seafood go up and down completely randomly.
Pair Corralation between Busan Ind and CJ Seafood
Assuming the 90 days trading horizon Busan Ind is expected to generate 0.95 times more return on investment than CJ Seafood. However, Busan Ind is 1.05 times less risky than CJ Seafood. It trades about 0.01 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.01 per unit of risk. If you would invest 7,858,541 in Busan Ind on September 26, 2024 and sell it today you would lose (138,541) from holding Busan Ind or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. CJ Seafood Corp
Performance |
| Timeline |
| Busan Ind |
| CJ Seafood Corp |
Busan Ind and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and CJ Seafood
The main advantage of trading using opposite Busan Ind and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind position performs unexpectedly, CJ Seafood 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 CJ Seafood will offset losses from the drop in CJ Seafood's long position.| Busan Ind vs. Woorim Machinery Co | Busan Ind vs. CU Medical Systems | Busan Ind vs. Hyundai Engineering Construction | Busan Ind vs. Seoul Food Industrial |
| CJ Seafood vs. AptaBio Therapeutics | CJ Seafood vs. Wonbang Tech Co | CJ Seafood vs. Busan Industrial Co | CJ Seafood vs. Busan Ind |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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