Correlation Between Sajo Seafood and Kwang Jin
Can any of the company-specific risk be diversified away by investing in both Sajo Seafood and Kwang Jin 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 Sajo Seafood and Kwang Jin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sajo Seafood and Kwang Jin Ind, you can compare the effects of market volatilities on Sajo Seafood and Kwang Jin 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 Sajo Seafood with a short position of Kwang Jin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sajo Seafood and Kwang Jin.
Diversification Opportunities for Sajo Seafood and Kwang Jin
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sajo and Kwang is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sajo Seafood and Kwang Jin Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwang Jin Ind and Sajo 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 Sajo Seafood are associated (or correlated) with Kwang Jin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwang Jin Ind has no effect on the direction of Sajo Seafood i.e., Sajo Seafood and Kwang Jin go up and down completely randomly.
Pair Corralation between Sajo Seafood and Kwang Jin
Assuming the 90 days trading horizon Sajo Seafood is expected to under-perform the Kwang Jin. But the stock apears to be less risky and, when comparing its historical volatility, Sajo Seafood is 1.28 times less risky than Kwang Jin. The stock trades about -0.11 of its potential returns per unit of risk. The Kwang Jin Ind is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 202,500 in Kwang Jin Ind on October 13, 2024 and sell it today you would lose (500.00) from holding Kwang Jin Ind or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sajo Seafood vs. Kwang Jin Ind
Performance |
| Timeline |
| Sajo Seafood |
| Kwang Jin Ind |
Sajo Seafood and Kwang Jin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sajo Seafood and Kwang Jin
The main advantage of trading using opposite Sajo Seafood and Kwang Jin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sajo Seafood position performs unexpectedly, Kwang Jin 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 Kwang Jin will offset losses from the drop in Kwang Jin's long position.| Sajo Seafood vs. Shinil Electronics Co | Sajo Seafood vs. Daewoo Electronic Components | Sajo Seafood vs. Hankukpackage Co | Sajo Seafood vs. Samji Electronics Co |
| Kwang Jin vs. Alton Sports CoLtd | Kwang Jin vs. Sajo Seafood | Kwang Jin vs. Foodnamoo | Kwang Jin vs. T3 Entertainment 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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