Correlation Between Shinhan WTI and CJ Seafood
Can any of the company-specific risk be diversified away by investing in both Shinhan WTI 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 Shinhan WTI and CJ Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinhan WTI Futures and CJ Seafood Corp, you can compare the effects of market volatilities on Shinhan WTI 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 Shinhan WTI with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinhan WTI and CJ Seafood.
Diversification Opportunities for Shinhan WTI and CJ Seafood
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Shinhan and 011155 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Shinhan WTI Futures 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 Shinhan WTI 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 Shinhan WTI Futures 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 Shinhan WTI i.e., Shinhan WTI and CJ Seafood go up and down completely randomly.
Pair Corralation between Shinhan WTI and CJ Seafood
Assuming the 90 days trading horizon Shinhan WTI Futures is expected to generate 1.25 times more return on investment than CJ Seafood. However, Shinhan WTI is 1.25 times more volatile than CJ Seafood Corp. It trades about 0.03 of its potential returns per unit of risk. CJ Seafood Corp is currently generating about -0.4 per unit of risk. If you would invest 716,000 in Shinhan WTI Futures on September 1, 2024 and sell it today you would earn a total of 5,500 from holding Shinhan WTI Futures or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shinhan WTI Futures vs. CJ Seafood Corp
Performance |
| Timeline |
| Shinhan WTI Futures |
| CJ Seafood Corp |
Shinhan WTI and CJ Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinhan WTI and CJ Seafood
The main advantage of trading using opposite Shinhan WTI and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinhan WTI 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.| Shinhan WTI vs. Kaonmedia Co | Shinhan WTI vs. YG Entertainment | Shinhan WTI vs. Dongil Metal Co | Shinhan WTI vs. DONGKUK TED METAL |
| CJ Seafood vs. Busan Industrial Co | CJ Seafood vs. Busan Ind | CJ Seafood vs. Mirae Asset Daewoo | CJ Seafood vs. Finebesteel |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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