Correlation Between CJ Cheiljedang and Green Cross
Can any of the company-specific risk be diversified away by investing in both CJ Cheiljedang and Green Cross 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 Green Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ Cheiljedang and Green Cross Medical, you can compare the effects of market volatilities on CJ Cheiljedang and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Cheiljedang and Green Cross.
Diversification Opportunities for CJ Cheiljedang and Green Cross
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 097950 and Green is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CJ Cheiljedang and Green Cross Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Medical 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Medical has no effect on the direction of CJ Cheiljedang i.e., CJ Cheiljedang and Green Cross go up and down completely randomly.
Pair Corralation between CJ Cheiljedang and Green Cross
Assuming the 90 days trading horizon CJ Cheiljedang is expected to generate 0.57 times more return on investment than Green Cross. However, CJ Cheiljedang is 1.76 times less risky than Green Cross. It trades about -0.02 of its potential returns per unit of risk. Green Cross Medical is currently generating about -0.03 per unit of risk. If you would invest 31,099,200 in CJ Cheiljedang on September 3, 2024 and sell it today you would lose (4,749,200) from holding CJ Cheiljedang or give up 15.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CJ Cheiljedang vs. Green Cross Medical
Performance |
| Timeline |
| CJ Cheiljedang |
| Green Cross Medical |
CJ Cheiljedang and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ Cheiljedang and Green Cross
The main advantage of trading using opposite CJ Cheiljedang and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Cheiljedang position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| CJ Cheiljedang vs. PJ Metal Co | CJ Cheiljedang vs. Dongwon Metal Co | CJ Cheiljedang vs. Heungkuk Metaltech CoLtd | CJ Cheiljedang vs. Daejung Chemicals Metals |
| Green Cross vs. Samsung Card Co | Green Cross vs. EBEST Investment Securities | Green Cross vs. Koh Young Technology | Green Cross vs. Hansol Chemica |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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