Correlation Between CJ Cheiljedang and MediaZen

Can any of the company-specific risk be diversified away by investing in both CJ Cheiljedang and MediaZen 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 MediaZen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CJ Cheiljedang and MediaZen, you can compare the effects of market volatilities on CJ Cheiljedang and MediaZen 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 MediaZen. Check out your portfolio center. Please also check ongoing floating volatility patterns of CJ Cheiljedang and MediaZen.

Diversification Opportunities for CJ Cheiljedang and MediaZen

-0.51

Correlation Coefficient

CJ Cheiljedang  MediaZen

Excellent diversification

The 3 months correlation between 097950 and MediaZen is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding CJ Cheiljedang and MediaZen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediaZen 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 MediaZen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediaZen has no effect on the direction of CJ Cheiljedang i.e., CJ Cheiljedang and MediaZen go up and down completely randomly.

Pair Corralation between CJ Cheiljedang and MediaZen

Assuming the 90 days trading horizon CJ Cheiljedang is expected to under-perform the MediaZen. But the stock apears to be less risky and, when comparing its historical volatility, CJ Cheiljedang is 1.69 times less risky than MediaZen. The stock trades about -0.02 of its potential returns per unit of risk. The MediaZen is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,270,000  in MediaZen on October 4, 2024 and sell it today you would lose (140,000) from holding MediaZen or give up 11.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CJ Cheiljedang  vs.  MediaZen

CJ Cheiljedang

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CJ Cheiljedang has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MediaZen

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MediaZen are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, MediaZen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CJ Cheiljedang and MediaZen

The main advantage of trading using opposite CJ Cheiljedang and MediaZen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CJ Cheiljedang position performs unexpectedly, MediaZen 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 MediaZen will offset losses from the drop in MediaZen's long position.

The idea behind CJ Cheiljedang and MediaZen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.