Correlation Between CJ Seafood and Next Bt
Can any of the company-specific risk be diversified away by investing in both CJ Seafood and Next Bt 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 CJ Seafood and Next Bt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ Seafood Corp and Next Bt Co, you can compare the effects of market volatilities on CJ Seafood and Next Bt 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 CJ Seafood with a short position of Next Bt. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Seafood and Next Bt.
Diversification Opportunities for CJ Seafood and Next Bt
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 011150 and Next is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding CJ Seafood Corp and Next Bt Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Bt and CJ Seafood 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 CJ Seafood Corp are associated (or correlated) with Next Bt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Bt has no effect on the direction of CJ Seafood i.e., CJ Seafood and Next Bt go up and down completely randomly.
Pair Corralation between CJ Seafood and Next Bt
Assuming the 90 days trading horizon CJ Seafood is expected to generate 4.64 times less return on investment than Next Bt. But when comparing it to its historical volatility, CJ Seafood Corp is 2.24 times less risky than Next Bt. It trades about 0.06 of its potential returns per unit of risk. Next Bt Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 21,300 in Next Bt Co on September 25, 2024 and sell it today you would earn a total of 2,100 from holding Next Bt Co or generate 9.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 66.67% |
Values | Daily Returns |
CJ Seafood Corp vs. Next Bt Co
Performance |
Timeline |
CJ Seafood Corp |
Next Bt |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CJ Seafood and Next Bt Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CJ Seafood and Next Bt
The main advantage of trading using opposite CJ Seafood and Next Bt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Seafood position performs unexpectedly, Next Bt 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 Next Bt will offset losses from the drop in Next Bt's long position.CJ Seafood vs. AptaBio Therapeutics | CJ Seafood vs. Wonbang Tech Co | CJ Seafood vs. Busan Industrial Co | CJ Seafood vs. Busan Ind |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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