Correlation Between CJ ENM and Sangsangin Investment
Can any of the company-specific risk be diversified away by investing in both CJ ENM and Sangsangin Investment 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 CJ ENM and Sangsangin Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ ENM and Sangsangin Investment Securities, you can compare the effects of market volatilities on CJ ENM and Sangsangin Investment 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 CJ ENM with a short position of Sangsangin Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ ENM and Sangsangin Investment.
Diversification Opportunities for CJ ENM and Sangsangin Investment
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 035760 and Sangsangin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CJ ENM and Sangsangin Investment Securiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsangin Investment and CJ ENM 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 CJ ENM are associated (or correlated) with Sangsangin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsangin Investment has no effect on the direction of CJ ENM i.e., CJ ENM and Sangsangin Investment go up and down completely randomly.
Pair Corralation between CJ ENM and Sangsangin Investment
Assuming the 90 days trading horizon CJ ENM is expected to generate 1.49 times more return on investment than Sangsangin Investment. However, CJ ENM is 1.49 times more volatile than Sangsangin Investment Securities. It trades about 0.04 of its potential returns per unit of risk. Sangsangin Investment Securities is currently generating about -0.08 per unit of risk. If you would invest 5,230,000 in CJ ENM on September 4, 2024 and sell it today you would earn a total of 1,150,000 from holding CJ ENM or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ ENM vs. Sangsangin Investment Securiti
Performance |
| Timeline |
| CJ ENM |
| Sangsangin Investment |
CJ ENM and Sangsangin Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ ENM and Sangsangin Investment
The main advantage of trading using opposite CJ ENM and Sangsangin Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ ENM position performs unexpectedly, Sangsangin Investment 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 Sangsangin Investment will offset losses from the drop in Sangsangin Investment's long position.The idea behind CJ ENM and Sangsangin Investment Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sangsangin Investment vs. Dongjin Semichem Co | Sangsangin Investment vs. AhnLab Inc | Sangsangin Investment vs. Posco ICT | Sangsangin Investment vs. CJ ENM |
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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