Correlation Between CJ Cheiljedang and ABOV Semiconductor
Can any of the company-specific risk be diversified away by investing in both CJ Cheiljedang and ABOV Semiconductor 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 Cheiljedang and ABOV Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CJ Cheiljedang and ABOV Semiconductor Co, you can compare the effects of market volatilities on CJ Cheiljedang and ABOV Semiconductor 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 Cheiljedang with a short position of ABOV Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Cheiljedang and ABOV Semiconductor.
Diversification Opportunities for CJ Cheiljedang and ABOV Semiconductor
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 097950 and ABOV is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding CJ Cheiljedang and ABOV Semiconductor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABOV Semiconductor and CJ Cheiljedang 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 Cheiljedang are associated (or correlated) with ABOV Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABOV Semiconductor has no effect on the direction of CJ Cheiljedang i.e., CJ Cheiljedang and ABOV Semiconductor go up and down completely randomly.
Pair Corralation between CJ Cheiljedang and ABOV Semiconductor
Assuming the 90 days trading horizon CJ Cheiljedang is expected to generate 0.72 times more return on investment than ABOV Semiconductor. However, CJ Cheiljedang is 1.39 times less risky than ABOV Semiconductor. It trades about -0.09 of its potential returns per unit of risk. ABOV Semiconductor Co is currently generating about -0.19 per unit of risk. If you would invest 29,400,000 in CJ Cheiljedang on October 4, 2024 and sell it today you would lose (3,850,000) from holding CJ Cheiljedang or give up 13.1% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
CJ Cheiljedang vs. ABOV Semiconductor Co
Performance |
Timeline |
CJ Cheiljedang |
ABOV Semiconductor |
CJ Cheiljedang and ABOV Semiconductor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CJ Cheiljedang and ABOV Semiconductor
The main advantage of trading using opposite CJ Cheiljedang and ABOV Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Cheiljedang position performs unexpectedly, ABOV Semiconductor 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 ABOV Semiconductor will offset losses from the drop in ABOV Semiconductor's long position.CJ Cheiljedang vs. Digital Imaging Technology | CJ Cheiljedang vs. iNtRON Biotechnology | CJ Cheiljedang vs. Digital Power Communications | CJ Cheiljedang vs. IC Technology Co |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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