Correlation Between Insung Information and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Insung Information 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 Insung Information and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and CJ Seafood Corp, you can compare the effects of market volatilities on Insung Information 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 Insung Information with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and CJ Seafood.
Diversification Opportunities for Insung Information and CJ Seafood
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insung and 011150 is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information 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 Insung Information 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 Insung Information 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 Insung Information i.e., Insung Information and CJ Seafood go up and down completely randomly.
Pair Corralation between Insung Information and CJ Seafood
Assuming the 90 days trading horizon Insung Information Co is expected to generate 1.37 times more return on investment than CJ Seafood. However, Insung Information is 1.37 times more volatile than CJ Seafood Corp. It trades about 0.17 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.16 per unit of risk. If you would invest 174,800 in Insung Information Co on October 28, 2024 and sell it today you would earn a total of 13,500 from holding Insung Information Co or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. CJ Seafood Corp
Performance |
| Timeline |
| Insung Information |
| CJ Seafood Corp |
Insung Information and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and CJ Seafood
The main advantage of trading using opposite Insung Information and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information 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.| Insung Information vs. Namhae Chemical | Insung Information vs. N2Tech Co | Insung Information vs. Wireless Power Amplifier | Insung Information vs. iNtRON Biotechnology |
| CJ Seafood vs. BIT Computer Co | CJ Seafood vs. Seers Technology | CJ Seafood vs. Dong A Steel Technology | CJ Seafood vs. Daesung Hi Tech 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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