Correlation Between Kakao Games and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Kakao Games 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 Kakao Games and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kakao Games Corp and CJ Seafood Corp, you can compare the effects of market volatilities on Kakao Games 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 Kakao Games with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kakao Games and CJ Seafood.
Diversification Opportunities for Kakao Games and CJ Seafood
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kakao and 011155 is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kakao Games Corp 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 Kakao Games 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 Kakao Games Corp 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 Kakao Games i.e., Kakao Games and CJ Seafood go up and down completely randomly.
Pair Corralation between Kakao Games and CJ Seafood
Assuming the 90 days trading horizon Kakao Games Corp is expected to generate 0.37 times more return on investment than CJ Seafood. However, Kakao Games Corp is 2.72 times less risky than CJ Seafood. It trades about 0.22 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about -0.02 per unit of risk. If you would invest 1,562,000 in Kakao Games Corp on September 14, 2024 and sell it today you would earn a total of 205,000 from holding Kakao Games Corp or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kakao Games Corp vs. CJ Seafood Corp
Performance |
| Timeline |
| Kakao Games Corp |
| CJ Seafood Corp |
Kakao Games and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kakao Games and CJ Seafood
The main advantage of trading using opposite Kakao Games and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kakao Games 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.| Kakao Games vs. Devsisters corporation | Kakao Games vs. Konan Technology | Kakao Games vs. Nice Information Telecommunication | Kakao Games vs. SKONEC Entertainment Co |
| CJ Seafood vs. CJ CheilJedang Corp | CJ Seafood vs. Solution Advanced Technology | CJ Seafood vs. Busan Industrial Co | CJ Seafood vs. Busan Ind |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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