Correlation Between Cots Technology and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Cots Technology 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 Cots Technology and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cots Technology Co and CJ Seafood Corp, you can compare the effects of market volatilities on Cots Technology 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 Cots Technology with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cots Technology and CJ Seafood.
Diversification Opportunities for Cots Technology and CJ Seafood
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cots and 011150 is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cots Technology 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 Cots 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 Cots Technology 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 Cots Technology i.e., Cots Technology and CJ Seafood go up and down completely randomly.
Pair Corralation between Cots Technology and CJ Seafood
Assuming the 90 days trading horizon Cots Technology Co is expected to under-perform the CJ Seafood. In addition to that, Cots Technology is 1.75 times more volatile than CJ Seafood Corp. It trades about -0.25 of its total potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.09 per unit of volatility. If you would invest 279,000 in CJ Seafood Corp on September 14, 2024 and sell it today you would earn a total of 11,000 from holding CJ Seafood Corp or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cots Technology Co vs. CJ Seafood Corp
Performance |
| Timeline |
| Cots Technology |
| CJ Seafood Corp |
Cots Technology and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cots Technology and CJ Seafood
The main advantage of trading using opposite Cots Technology and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cots Technology 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.| Cots Technology vs. Samsung Electronics Co | Cots Technology vs. Samsung Electronics Co | Cots Technology vs. LG Energy Solution | Cots Technology vs. SK Hynix |
| CJ Seafood vs. Samsung Electronics Co | CJ Seafood vs. Samsung Electronics Co | CJ Seafood vs. SK Hynix | CJ Seafood vs. POSCO Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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