Correlation Between CJ ENM and Daesung Private
Can any of the company-specific risk be diversified away by investing in both CJ ENM and Daesung Private 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 Daesung Private into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ ENM and Daesung Private Equity, you can compare the effects of market volatilities on CJ ENM and Daesung Private 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 Daesung Private. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ ENM and Daesung Private.
Diversification Opportunities for CJ ENM and Daesung Private
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 035760 and Daesung is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CJ ENM and Daesung Private Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daesung Private Equity 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 Daesung Private. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daesung Private Equity has no effect on the direction of CJ ENM i.e., CJ ENM and Daesung Private go up and down completely randomly.
Pair Corralation between CJ ENM and Daesung Private
Assuming the 90 days trading horizon CJ ENM is expected to generate 0.72 times more return on investment than Daesung Private. However, CJ ENM is 1.39 times less risky than Daesung Private. It trades about -0.01 of its potential returns per unit of risk. Daesung Private Equity is currently generating about -0.01 per unit of risk. If you would invest 7,810,000 in CJ ENM on September 4, 2024 and sell it today you would lose (1,430,000) from holding CJ ENM or give up 18.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ ENM vs. Daesung Private Equity
Performance |
| Timeline |
| CJ ENM |
| Daesung Private Equity |
CJ ENM and Daesung Private Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ ENM and Daesung Private
The main advantage of trading using opposite CJ ENM and Daesung Private positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ ENM position performs unexpectedly, Daesung Private 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 Daesung Private will offset losses from the drop in Daesung Private's long position.The idea behind CJ ENM and Daesung Private Equity 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.| Daesung Private vs. Dongjin Semichem Co | Daesung Private vs. AhnLab Inc | Daesung Private vs. Posco ICT | Daesung Private 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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