Correlation Between Haitai Confectionery and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Haitai Confectionery 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 Haitai Confectionery and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haitai Confectionery Foods and CJ Seafood Corp, you can compare the effects of market volatilities on Haitai Confectionery 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 Haitai Confectionery with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haitai Confectionery and CJ Seafood.
Diversification Opportunities for Haitai Confectionery and CJ Seafood
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haitai and 011150 is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Haitai Confectionery Foods 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 Haitai Confectionery 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 Haitai Confectionery Foods 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 Haitai Confectionery i.e., Haitai Confectionery and CJ Seafood go up and down completely randomly.
Pair Corralation between Haitai Confectionery and CJ Seafood
Assuming the 90 days trading horizon Haitai Confectionery Foods is expected to generate 0.73 times more return on investment than CJ Seafood. However, Haitai Confectionery Foods is 1.37 times less risky than CJ Seafood. It trades about -0.04 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 595,538 in Haitai Confectionery Foods on November 6, 2024 and sell it today you would lose (32,538) from holding Haitai Confectionery Foods or give up 5.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haitai Confectionery Foods vs. CJ Seafood Corp
Performance |
| Timeline |
| Haitai Confectionery |
| CJ Seafood Corp |
Haitai Confectionery and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haitai Confectionery and CJ Seafood
The main advantage of trading using opposite Haitai Confectionery and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haitai Confectionery 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.| Haitai Confectionery vs. SEOWONINTECHCoLtd | Haitai Confectionery vs. KMH Hitech Co | Haitai Confectionery vs. Dongwoon Anatech Co | Haitai Confectionery vs. Mirai Semiconductors Co |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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