Correlation Between Barunson Entertainment and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Barunson Entertainment 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 Barunson Entertainment and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barunson Entertainment Arts and CJ Seafood Corp, you can compare the effects of market volatilities on Barunson Entertainment 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 Barunson Entertainment with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barunson Entertainment and CJ Seafood.
Diversification Opportunities for Barunson Entertainment and CJ Seafood
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barunson and 011155 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Barunson Entertainment Arts 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 Barunson Entertainment 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 Barunson Entertainment Arts 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 Barunson Entertainment i.e., Barunson Entertainment and CJ Seafood go up and down completely randomly.
Pair Corralation between Barunson Entertainment and CJ Seafood
Assuming the 90 days trading horizon Barunson Entertainment Arts is expected to generate 1.55 times more return on investment than CJ Seafood. However, Barunson Entertainment is 1.55 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 -0.36 per unit of risk. If you would invest 47,500 in Barunson Entertainment Arts on August 30, 2024 and sell it today you would lose (3,500) from holding Barunson Entertainment Arts or give up 7.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barunson Entertainment Arts vs. CJ Seafood Corp
Performance |
| Timeline |
| Barunson Entertainment |
| CJ Seafood Corp |
Barunson Entertainment and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barunson Entertainment and CJ Seafood
The main advantage of trading using opposite Barunson Entertainment and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barunson Entertainment 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.| Barunson Entertainment vs. Korea New Network | Barunson Entertainment vs. Busan Industrial Co | Barunson Entertainment vs. Busan Ind | Barunson Entertainment vs. Shinhan WTI Futures |
| CJ Seafood vs. CJ CheilJedang Corp | CJ Seafood vs. Busan Industrial Co | CJ Seafood vs. Busan Ind | CJ Seafood vs. Shinhan WTI Futures |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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