Correlation Between Hwangkum Steel and CJ CheilJedang
Can any of the company-specific risk be diversified away by investing in both Hwangkum Steel 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 Hwangkum Steel and CJ CheilJedang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hwangkum Steel Technology and CJ CheilJedang Corp, you can compare the effects of market volatilities on Hwangkum Steel 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 Hwangkum Steel with a short position of CJ CheilJedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hwangkum Steel and CJ CheilJedang.
Diversification Opportunities for Hwangkum Steel and CJ CheilJedang
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hwangkum and 097955 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hwangkum Steel Technology 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 Hwangkum Steel 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 Hwangkum Steel Technology 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 Hwangkum Steel i.e., Hwangkum Steel and CJ CheilJedang go up and down completely randomly.
Pair Corralation between Hwangkum Steel and CJ CheilJedang
Assuming the 90 days trading horizon Hwangkum Steel Technology is expected to under-perform the CJ CheilJedang. But the stock apears to be less risky and, when comparing its historical volatility, Hwangkum Steel Technology is 1.07 times less risky than CJ CheilJedang. The stock trades about -0.1 of its potential returns per unit of risk. The CJ CheilJedang Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12,889,900 in CJ CheilJedang Corp on August 24, 2024 and sell it today you would earn a total of 510,100 from holding CJ CheilJedang Corp or generate 3.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hwangkum Steel Technology vs. CJ CheilJedang Corp
Performance |
| Timeline |
| Hwangkum Steel Technology |
| CJ CheilJedang Corp |
Hwangkum Steel and CJ CheilJedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hwangkum Steel and CJ CheilJedang
The main advantage of trading using opposite Hwangkum Steel and CJ CheilJedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hwangkum Steel 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.| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
| CJ CheilJedang vs. Hwangkum Steel Technology | CJ CheilJedang vs. Amogreentech Co | CJ CheilJedang vs. Intellian Technologies | CJ CheilJedang vs. Neungyule Education |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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