Correlation Between Daewon Chemical and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Daewon Chemical 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 Daewon Chemical and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewon Chemical Co and CJ Seafood Corp, you can compare the effects of market volatilities on Daewon Chemical 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 Daewon Chemical with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewon Chemical and CJ Seafood.
Diversification Opportunities for Daewon Chemical and CJ Seafood
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Daewon and 011150 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Daewon Chemical Co 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 Daewon Chemical 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 Daewon Chemical Co 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 Daewon Chemical i.e., Daewon Chemical and CJ Seafood go up and down completely randomly.
Pair Corralation between Daewon Chemical and CJ Seafood
Assuming the 90 days trading horizon Daewon Chemical is expected to generate 2.69 times less return on investment than CJ Seafood. But when comparing it to its historical volatility, Daewon Chemical Co is 4.23 times less risky than CJ Seafood. It trades about 0.0 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 309,500 in CJ Seafood Corp on October 15, 2024 and sell it today you would lose (2,500) from holding CJ Seafood Corp or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewon Chemical Co vs. CJ Seafood Corp
Performance |
| Timeline |
| Daewon Chemical |
| CJ Seafood Corp |
Daewon Chemical and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewon Chemical and CJ Seafood
The main advantage of trading using opposite Daewon Chemical and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewon Chemical 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.| Daewon Chemical vs. Digital Power Communications | Daewon Chemical vs. Tamul Multimedia Co | Daewon Chemical vs. Cube Entertainment | Daewon Chemical vs. Mgame Corp |
| CJ Seafood vs. Hanwha Chemical Corp | CJ Seafood vs. TK Chemical | CJ Seafood vs. LB Investment | CJ Seafood vs. Daewon Chemical 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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