Correlation Between CJ Cheiljedang and TAEYANG
Can any of the company-specific risk be diversified away by investing in both CJ Cheiljedang and TAEYANG 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 Cheiljedang and TAEYANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ Cheiljedang and TAEYANG, you can compare the effects of market volatilities on CJ Cheiljedang and TAEYANG 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 Cheiljedang with a short position of TAEYANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Cheiljedang and TAEYANG.
Diversification Opportunities for CJ Cheiljedang and TAEYANG
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 097950 and TAEYANG is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CJ Cheiljedang and TAEYANG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAEYANG and CJ Cheiljedang 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 Cheiljedang are associated (or correlated) with TAEYANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAEYANG has no effect on the direction of CJ Cheiljedang i.e., CJ Cheiljedang and TAEYANG go up and down completely randomly.
Pair Corralation between CJ Cheiljedang and TAEYANG
Assuming the 90 days trading horizon CJ Cheiljedang is expected to under-perform the TAEYANG. In addition to that, CJ Cheiljedang is 1.82 times more volatile than TAEYANG. It trades about -0.02 of its total potential returns per unit of risk. TAEYANG is currently generating about -0.01 per unit of volatility. If you would invest 665,668 in TAEYANG on October 18, 2024 and sell it today you would lose (32,668) from holding TAEYANG or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Cheiljedang vs. TAEYANG
Performance |
| Timeline |
| CJ Cheiljedang |
| TAEYANG |
CJ Cheiljedang and TAEYANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Cheiljedang and TAEYANG
The main advantage of trading using opposite CJ Cheiljedang and TAEYANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Cheiljedang position performs unexpectedly, TAEYANG 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 TAEYANG will offset losses from the drop in TAEYANG's long position.| CJ Cheiljedang vs. Insung Information Co | CJ Cheiljedang vs. Finebesteel | CJ Cheiljedang vs. Daechang Steel Co | CJ Cheiljedang vs. Hankuk Steel Wire |
| TAEYANG vs. Digital Power Communications | TAEYANG vs. Homecast CoLtd | TAEYANG vs. Korea Information Communications | TAEYANG vs. Automobile Pc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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