Correlation Between CJ CheilJedang and Hwangkum Steel
Can any of the company-specific risk be diversified away by investing in both CJ CheilJedang and Hwangkum Steel 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 Hwangkum Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ CheilJedang Corp and Hwangkum Steel Technology, you can compare the effects of market volatilities on CJ CheilJedang and Hwangkum Steel 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 Hwangkum Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ CheilJedang and Hwangkum Steel.
Diversification Opportunities for CJ CheilJedang and Hwangkum Steel
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 097955 and Hwangkum is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CJ CheilJedang Corp and Hwangkum Steel Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwangkum Steel Technology 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 Corp are associated (or correlated) with Hwangkum Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwangkum Steel Technology has no effect on the direction of CJ CheilJedang i.e., CJ CheilJedang and Hwangkum Steel go up and down completely randomly.
Pair Corralation between CJ CheilJedang and Hwangkum Steel
Assuming the 90 days trading horizon CJ CheilJedang Corp is expected to generate 0.63 times more return on investment than Hwangkum Steel. However, CJ CheilJedang Corp is 1.59 times less risky than Hwangkum Steel. It trades about -0.02 of its potential returns per unit of risk. Hwangkum Steel Technology is currently generating about -0.03 per unit of risk. If you would invest 15,569,300 in CJ CheilJedang Corp on August 28, 2024 and sell it today you would lose (2,319,300) from holding CJ CheilJedang Corp or give up 14.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.78% |
| Values | Daily Returns |
CJ CheilJedang Corp vs. Hwangkum Steel Technology
Performance |
| Timeline |
| CJ CheilJedang Corp |
| Hwangkum Steel Technology |
CJ CheilJedang and Hwangkum Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CJ CheilJedang and Hwangkum Steel
The main advantage of trading using opposite CJ CheilJedang and Hwangkum Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ CheilJedang position performs unexpectedly, Hwangkum Steel 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 Hwangkum Steel will offset losses from the drop in Hwangkum Steel's long position.| CJ CheilJedang vs. Busan Industrial Co | CJ CheilJedang vs. Busan Ind | CJ CheilJedang vs. Mirae Asset Daewoo | CJ CheilJedang vs. UNISEM Co |
| Hwangkum Steel vs. AptaBio Therapeutics | Hwangkum Steel vs. Daewoo SBI SPAC | Hwangkum Steel vs. Dream Security co | Hwangkum Steel vs. Microfriend |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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