Correlation Between Solution Advanced and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Solution Advanced 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 Solution Advanced and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Advanced Technology and CJ Seafood Corp, you can compare the effects of market volatilities on Solution Advanced 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 Solution Advanced with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Advanced and CJ Seafood.
Diversification Opportunities for Solution Advanced and CJ Seafood
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Solution and 011155 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Solution Advanced Technology 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 Solution Advanced 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 Solution Advanced Technology 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 Solution Advanced i.e., Solution Advanced and CJ Seafood go up and down completely randomly.
Pair Corralation between Solution Advanced and CJ Seafood
Assuming the 90 days trading horizon Solution Advanced is expected to generate 1.98 times less return on investment than CJ Seafood. But when comparing it to its historical volatility, Solution Advanced Technology is 1.96 times less risky than CJ Seafood. It trades about 0.09 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,760,000 in CJ Seafood Corp on September 12, 2024 and sell it today you would earn a total of 173,000 from holding CJ Seafood Corp or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Advanced Technology vs. CJ Seafood Corp
Performance |
| Timeline |
| Solution Advanced |
| CJ Seafood Corp |
Solution Advanced and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Advanced and CJ Seafood
The main advantage of trading using opposite Solution Advanced and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Advanced 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.| Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. Samsung Electronics Co | Solution Advanced vs. LG Energy Solution | Solution Advanced vs. SK Hynix |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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