Correlation Between RF Materials and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both RF Materials 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 RF Materials and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RF Materials Co and CJ Seafood Corp, you can compare the effects of market volatilities on RF Materials 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 RF Materials with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Materials and CJ Seafood.
Diversification Opportunities for RF Materials and CJ Seafood
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 327260 and 011150 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding RF Materials Co 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 RF Materials 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 RF Materials Co 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 RF Materials i.e., RF Materials and CJ Seafood go up and down completely randomly.
Pair Corralation between RF Materials and CJ Seafood
Assuming the 90 days trading horizon RF Materials Co is expected to under-perform the CJ Seafood. But the stock apears to be less risky and, when comparing its historical volatility, RF Materials Co is 1.2 times less risky than CJ Seafood. The stock trades about -0.16 of its potential returns per unit of risk. The CJ Seafood Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 457,000 in CJ Seafood Corp on August 31, 2024 and sell it today you would lose (166,500) from holding CJ Seafood Corp or give up 36.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RF Materials Co vs. CJ Seafood Corp
Performance |
| Timeline |
| RF Materials |
| CJ Seafood Corp |
RF Materials and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Materials and CJ Seafood
The main advantage of trading using opposite RF Materials and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Materials 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.| RF Materials vs. Cheryong Industrial CoLtd | RF Materials vs. Histeel | RF Materials vs. Pyung Hwa Industrial | RF Materials vs. BooKook Steel Co |
| CJ Seafood vs. AptaBio Therapeutics | CJ Seafood vs. Daewoo SBI SPAC | CJ Seafood vs. Dream Security co | CJ Seafood vs. Microfriend |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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