Correlation Between TK Chemical and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both TK Chemical 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 TK Chemical and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TK Chemical and CJ Seafood Corp, you can compare the effects of market volatilities on TK Chemical 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 TK Chemical with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of TK Chemical and CJ Seafood.
Diversification Opportunities for TK Chemical and CJ Seafood
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 104480 and 011150 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding TK Chemical 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 TK Chemical 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 TK Chemical 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 TK Chemical i.e., TK Chemical and CJ Seafood go up and down completely randomly.
Pair Corralation between TK Chemical and CJ Seafood
Assuming the 90 days trading horizon TK Chemical is expected to generate 2.23 times more return on investment than CJ Seafood. However, TK Chemical is 2.23 times more volatile than CJ Seafood Corp. It trades about 0.18 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.0 per unit of risk. If you would invest 136,900 in TK Chemical on October 15, 2024 and sell it today you would earn a total of 29,700 from holding TK Chemical or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TK Chemical vs. CJ Seafood Corp
Performance |
| Timeline |
| TK Chemical |
| CJ Seafood Corp |
TK Chemical and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TK Chemical and CJ Seafood
The main advantage of trading using opposite TK Chemical and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TK Chemical 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.| TK Chemical vs. Kakao Games Corp | TK Chemical vs. Anam Electronics Co | TK Chemical vs. Korea Electronic Certification | TK Chemical vs. Cuckoo Electronics Co |
| CJ Seafood vs. Hanwha Chemical Corp | CJ Seafood vs. TK Chemical | CJ Seafood vs. LB Investment | CJ Seafood vs. Daewon Chemical 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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