Correlation Between Daejung Chemicals and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals 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 Daejung Chemicals and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejung Chemicals Metals and CJ Seafood Corp, you can compare the effects of market volatilities on Daejung Chemicals 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 Daejung Chemicals with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and CJ Seafood.
Diversification Opportunities for Daejung Chemicals and CJ Seafood
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Daejung and 011150 is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals 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 Daejung Chemicals 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 Daejung Chemicals Metals 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 Daejung Chemicals i.e., Daejung Chemicals and CJ Seafood go up and down completely randomly.
Pair Corralation between Daejung Chemicals and CJ Seafood
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the CJ Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Daejung Chemicals Metals is 1.02 times less risky than CJ Seafood. The stock trades about -0.12 of its potential returns per unit of risk. The CJ Seafood Corp is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 324,500 in CJ Seafood Corp on September 13, 2024 and sell it today you would lose (34,500) from holding CJ Seafood Corp or give up 10.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. CJ Seafood Corp
Performance |
| Timeline |
| Daejung Chemicals Metals |
| CJ Seafood Corp |
Daejung Chemicals and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and CJ Seafood
The main advantage of trading using opposite Daejung Chemicals and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals 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.| Daejung Chemicals vs. LG Chem | Daejung Chemicals vs. Chunbo Co | Daejung Chemicals vs. DukSan Neolux CoLtd | Daejung Chemicals vs. LIG ES SPAC |
| CJ Seafood vs. PNC Technologies co | CJ Seafood vs. Shinhan Inverse Silver | CJ Seafood vs. Cots Technology Co | CJ Seafood vs. PH Tech 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |