Correlation Between Busan Industrial and CJ CheilJedang
Can any of the company-specific risk be diversified away by investing in both Busan Industrial and CJ CheilJedang 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 Industrial and CJ CheilJedang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Industrial Co and CJ CheilJedang Corp, you can compare the effects of market volatilities on Busan Industrial and CJ CheilJedang 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 Industrial with a short position of CJ CheilJedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Industrial and CJ CheilJedang.
Diversification Opportunities for Busan Industrial and CJ CheilJedang
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Busan and 097955 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Busan Industrial Co and CJ CheilJedang Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ CheilJedang Corp and Busan Industrial 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 Industrial Co are associated (or correlated) with CJ CheilJedang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ CheilJedang Corp has no effect on the direction of Busan Industrial i.e., Busan Industrial and CJ CheilJedang go up and down completely randomly.
Pair Corralation between Busan Industrial and CJ CheilJedang
Assuming the 90 days trading horizon Busan Industrial Co is expected to generate 5.3 times more return on investment than CJ CheilJedang. However, Busan Industrial is 5.3 times more volatile than CJ CheilJedang Corp. It trades about 0.09 of its potential returns per unit of risk. CJ CheilJedang Corp is currently generating about -0.02 per unit of risk. If you would invest 5,600,000 in Busan Industrial Co on September 1, 2024 and sell it today you would earn a total of 540,000 from holding Busan Industrial Co or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Busan Industrial Co vs. CJ CheilJedang Corp
Performance |
| Timeline |
| Busan Industrial |
| CJ CheilJedang Corp |
Busan Industrial and CJ CheilJedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Industrial and CJ CheilJedang
The main advantage of trading using opposite Busan Industrial and CJ CheilJedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Industrial position performs unexpectedly, CJ CheilJedang 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 CheilJedang will offset losses from the drop in CJ CheilJedang's long position.| Busan Industrial vs. AptaBio Therapeutics | Busan Industrial vs. Daewoo SBI SPAC | Busan Industrial vs. Dream Security co | Busan Industrial vs. Microfriend |
| CJ CheilJedang vs. Seoul Electronics Telecom | CJ CheilJedang vs. Cloud Air CoLtd | CJ CheilJedang vs. Ssangyong Information Communication | CJ CheilJedang vs. Jeju Air 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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