Correlation Between CJ Cheiljedang and Tway Air
Can any of the company-specific risk be diversified away by investing in both CJ Cheiljedang and Tway Air 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 Tway Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ Cheiljedang and Tway Air Co, you can compare the effects of market volatilities on CJ Cheiljedang and Tway Air 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 Tway Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Cheiljedang and Tway Air.
Diversification Opportunities for CJ Cheiljedang and Tway Air
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 097950 and Tway is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CJ Cheiljedang and Tway Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tway Air 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 Tway Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tway Air has no effect on the direction of CJ Cheiljedang i.e., CJ Cheiljedang and Tway Air go up and down completely randomly.
Pair Corralation between CJ Cheiljedang and Tway Air
Assuming the 90 days trading horizon CJ Cheiljedang is expected to under-perform the Tway Air. But the stock apears to be less risky and, when comparing its historical volatility, CJ Cheiljedang is 1.73 times less risky than Tway Air. The stock trades about -0.09 of its potential returns per unit of risk. The Tway Air Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 280,000 in Tway Air Co on September 2, 2024 and sell it today you would earn a total of 14,500 from holding Tway Air Co or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Cheiljedang vs. Tway Air Co
Performance |
| Timeline |
| CJ Cheiljedang |
| Tway Air |
CJ Cheiljedang and Tway Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Cheiljedang and Tway Air
The main advantage of trading using opposite CJ Cheiljedang and Tway Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Cheiljedang position performs unexpectedly, Tway Air 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 Tway Air will offset losses from the drop in Tway Air's long position.| CJ Cheiljedang vs. Green Cross Medical | CJ Cheiljedang vs. Handok Clean Tech | CJ Cheiljedang vs. Polaris Office Corp | CJ Cheiljedang vs. Daishin Information Communications |
| Tway Air vs. Nice Information Telecommunication | Tway Air vs. Sejong Industrial | Tway Air vs. Songwon Industrial Co | Tway Air vs. Samick Musical Instruments |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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