Correlation Between Korea Information and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Korea 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 Korea 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 Korea Information Engineering and CJ Seafood Corp, you can compare the effects of market volatilities on Korea 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 Korea Information with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and CJ Seafood.
Diversification Opportunities for Korea Information and CJ Seafood
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and 011150 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Engineering 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 Korea 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 Korea Information Engineering 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 Korea Information i.e., Korea Information and CJ Seafood go up and down completely randomly.
Pair Corralation between Korea Information and CJ Seafood
Assuming the 90 days trading horizon Korea Information Engineering is expected to generate 0.91 times more return on investment than CJ Seafood. However, Korea Information Engineering is 1.1 times less risky than CJ Seafood. It trades about -0.01 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about -0.04 per unit of risk. If you would invest 269,500 in Korea Information Engineering on November 6, 2024 and sell it today you would lose (9,500) from holding Korea Information Engineering or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Engineering vs. CJ Seafood Corp
Performance |
| Timeline |
| Korea Information |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CJ Seafood Corp |
Korea Information and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and CJ Seafood
The main advantage of trading using opposite Korea Information and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea 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.| Korea Information vs. Iljin Display | Korea Information vs. KPX Green Chemical | Korea Information vs. Korea Petro Chemical | Korea Information vs. Miwon Chemical |
| CJ Seafood vs. Digital Power Communications | CJ Seafood vs. Lotte Data Communication | CJ Seafood vs. Korea Shipbuilding Offshore | CJ Seafood vs. LG Display 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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