Correlation Between Choil Aluminum and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Choil Aluminum 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 Choil Aluminum and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choil Aluminum and CJ Seafood Corp, you can compare the effects of market volatilities on Choil Aluminum 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 Choil Aluminum with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choil Aluminum and CJ Seafood.
Diversification Opportunities for Choil Aluminum and CJ Seafood
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Choil and 011150 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum 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 Choil Aluminum i.e., Choil Aluminum and CJ Seafood go up and down completely randomly.
Pair Corralation between Choil Aluminum and CJ Seafood
Assuming the 90 days trading horizon Choil Aluminum is expected to under-perform the CJ Seafood. In addition to that, Choil Aluminum is 1.03 times more volatile than CJ Seafood Corp. It trades about -0.01 of its total potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.01 per unit of volatility. If you would invest 311,000 in CJ Seafood Corp on October 16, 2024 and sell it today you would lose (8,000) from holding CJ Seafood Corp or give up 2.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choil Aluminum vs. CJ Seafood Corp
Performance |
| Timeline |
| Choil Aluminum |
| CJ Seafood Corp |
Choil Aluminum and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choil Aluminum and CJ Seafood
The main advantage of trading using opposite Choil Aluminum and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choil Aluminum 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.| Choil Aluminum vs. ABCO Electronics Co | Choil Aluminum vs. Narae Nanotech Corp | Choil Aluminum vs. Shinil Electronics Co | Choil Aluminum vs. Raontech |
| CJ Seafood vs. CKH Food Health | CJ Seafood vs. Choil Aluminum | CJ Seafood vs. Duksan Hi Metal | CJ Seafood vs. BIT Computer 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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