Correlation Between CJ ENM and Kginicis CoLtd
Can any of the company-specific risk be diversified away by investing in both CJ ENM and Kginicis CoLtd 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 Kginicis CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ ENM and Kginicis CoLtd, you can compare the effects of market volatilities on CJ ENM and Kginicis CoLtd 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 Kginicis CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ ENM and Kginicis CoLtd.
Diversification Opportunities for CJ ENM and Kginicis CoLtd
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 035760 and Kginicis is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding CJ ENM and Kginicis CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kginicis CoLtd 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 Kginicis CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kginicis CoLtd has no effect on the direction of CJ ENM i.e., CJ ENM and Kginicis CoLtd go up and down completely randomly.
Pair Corralation between CJ ENM and Kginicis CoLtd
Assuming the 90 days trading horizon CJ ENM is expected to under-perform the Kginicis CoLtd. In addition to that, CJ ENM is 2.02 times more volatile than Kginicis CoLtd. It trades about -0.08 of its total potential returns per unit of risk. Kginicis CoLtd is currently generating about -0.11 per unit of volatility. If you would invest 1,121,000 in Kginicis CoLtd on August 31, 2024 and sell it today you would lose (199,000) from holding Kginicis CoLtd or give up 17.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ ENM vs. Kginicis CoLtd
Performance |
| Timeline |
| CJ ENM |
| Kginicis CoLtd |
CJ ENM and Kginicis CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ ENM and Kginicis CoLtd
The main advantage of trading using opposite CJ ENM and Kginicis CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ ENM position performs unexpectedly, Kginicis CoLtd 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 Kginicis CoLtd will offset losses from the drop in Kginicis CoLtd's long position.The idea behind CJ ENM and Kginicis CoLtd 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.| Kginicis CoLtd vs. NHN KCP Corp | Kginicis CoLtd vs. AfreecaTV Co | Kginicis CoLtd vs. LEENO Industrial | Kginicis CoLtd 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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