Correlation Between InnoTherapy and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both InnoTherapy 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 InnoTherapy and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and CJ Seafood Corp, you can compare the effects of market volatilities on InnoTherapy 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 InnoTherapy with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and CJ Seafood.
Diversification Opportunities for InnoTherapy and CJ Seafood
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InnoTherapy and 011155 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy 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 InnoTherapy 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 InnoTherapy 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 InnoTherapy i.e., InnoTherapy and CJ Seafood go up and down completely randomly.
Pair Corralation between InnoTherapy and CJ Seafood
Assuming the 90 days trading horizon InnoTherapy is expected to generate 0.78 times more return on investment than CJ Seafood. However, InnoTherapy is 1.28 times less risky than CJ Seafood. It trades about -0.08 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about -0.1 per unit of risk. If you would invest 1,060,000 in InnoTherapy on September 3, 2024 and sell it today you would lose (200,000) from holding InnoTherapy or give up 18.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. CJ Seafood Corp
Performance |
| Timeline |
| InnoTherapy |
| CJ Seafood Corp |
InnoTherapy and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and CJ Seafood
The main advantage of trading using opposite InnoTherapy and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy 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.| InnoTherapy vs. Kolon Life Science | InnoTherapy vs. JETEMA Co | InnoTherapy vs. Aminologics CoLtd | InnoTherapy vs. Daihan Pharmaceutical CoLtd |
| CJ Seafood vs. Korea Computer | CJ Seafood vs. Dongbang Transport Logistics | CJ Seafood vs. Hanjin Transportation Co | CJ Seafood vs. Inzi Display CoLtd |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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