Correlation Between Amogreentech and CJ CheilJedang
Can any of the company-specific risk be diversified away by investing in both Amogreentech and CJ CheilJedang 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 Amogreentech and CJ CheilJedang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amogreentech Co and CJ CheilJedang Corp, you can compare the effects of market volatilities on Amogreentech and CJ CheilJedang 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 Amogreentech with a short position of CJ CheilJedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amogreentech and CJ CheilJedang.
Diversification Opportunities for Amogreentech and CJ CheilJedang
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amogreentech and 097955 is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Amogreentech Co and CJ CheilJedang Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CJ CheilJedang Corp and Amogreentech 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 Amogreentech Co are associated (or correlated) with CJ CheilJedang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CJ CheilJedang Corp has no effect on the direction of Amogreentech i.e., Amogreentech and CJ CheilJedang go up and down completely randomly.
Pair Corralation between Amogreentech and CJ CheilJedang
Assuming the 90 days trading horizon Amogreentech Co is expected to under-perform the CJ CheilJedang. In addition to that, Amogreentech is 2.68 times more volatile than CJ CheilJedang Corp. It trades about -0.08 of its total potential returns per unit of risk. CJ CheilJedang Corp is currently generating about -0.07 per unit of volatility. If you would invest 14,038,200 in CJ CheilJedang Corp on August 28, 2024 and sell it today you would lose (788,200) from holding CJ CheilJedang Corp or give up 5.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amogreentech Co vs. CJ CheilJedang Corp
Performance |
| Timeline |
| Amogreentech |
| CJ CheilJedang Corp |
Amogreentech and CJ CheilJedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amogreentech and CJ CheilJedang
The main advantage of trading using opposite Amogreentech and CJ CheilJedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amogreentech position performs unexpectedly, CJ CheilJedang 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 CheilJedang will offset losses from the drop in CJ CheilJedang's long position.The idea behind Amogreentech Co and CJ CheilJedang Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CJ CheilJedang vs. MetaLabs Co | CJ CheilJedang vs. Cheryong Industrial CoLtd | CJ CheilJedang vs. Eagon Industrial Co | CJ CheilJedang vs. Haesung Industrial 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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