Correlation Between People Technology and CJ CheilJedang
Can any of the company-specific risk be diversified away by investing in both People Technology 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 People Technology and CJ CheilJedang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between People Technology and CJ CheilJedang Corp, you can compare the effects of market volatilities on People Technology 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 People Technology with a short position of CJ CheilJedang. Check out your portfolio center. Please also check ongoing floating volatility patterns of People Technology and CJ CheilJedang.
Diversification Opportunities for People Technology and CJ CheilJedang
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between People and 097955 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding People Technology 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 People Technology 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 People Technology 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 People Technology i.e., People Technology and CJ CheilJedang go up and down completely randomly.
Pair Corralation between People Technology and CJ CheilJedang
Assuming the 90 days trading horizon People Technology is expected to generate 2.93 times more return on investment than CJ CheilJedang. However, People Technology is 2.93 times more volatile than CJ CheilJedang Corp. It trades about 0.02 of its potential returns per unit of risk. CJ CheilJedang Corp is currently generating about -0.03 per unit of risk. If you would invest 4,256,530 in People Technology on September 13, 2024 and sell it today you would lose (91,530) from holding People Technology or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
People Technology vs. CJ CheilJedang Corp
Performance |
| Timeline |
| People Technology |
| CJ CheilJedang Corp |
People Technology and CJ CheilJedang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with People Technology and CJ CheilJedang
The main advantage of trading using opposite People Technology and CJ CheilJedang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if People Technology 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.| People Technology vs. Korea New Network | People Technology vs. Solution Advanced Technology | People Technology vs. Busan Industrial Co | People Technology vs. Busan Ind |
| CJ CheilJedang vs. Automobile Pc | CJ CheilJedang vs. CJ Seafood Corp | CJ CheilJedang vs. Jinro Distillers Co | CJ CheilJedang vs. Hankukpackage 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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