Correlation Between Access Bio and CJ Seafood

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

By analyzing existing cross correlation between Access Bio and CJ Seafood Corp, you can compare the effects of market volatilities on Access Bio 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 Access Bio with a short position of CJ Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Bio and CJ Seafood.

Diversification Opportunities for Access Bio and CJ Seafood

0.1

Correlation Coefficient

Access Bio  CJ Seafood

Average diversification

The 3 months correlation between Access and 011150 is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Access Bio 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 Access Bio 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 Access Bio 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 Access Bio i.e., Access Bio and CJ Seafood go up and down completely randomly.

Pair Corralation between Access Bio and CJ Seafood

Assuming the 90 days trading horizon Access Bio is expected to generate 1.35 times less return on investment than CJ Seafood. In addition to that, Access Bio is 1.41 times more volatile than CJ Seafood Corp. It trades about 0.03 of its total potential returns per unit of risk. CJ Seafood Corp is currently generating about 0.05 per unit of volatility. If you would invest  291,500  in CJ Seafood Corp on December 4, 2024 and sell it today you would earn a total of  19,000  from holding CJ Seafood Corp or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Access Bio  vs.  CJ Seafood Corp

Access Bio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Access Bio are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Access Bio may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CJ Seafood Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CJ Seafood Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, CJ Seafood may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Access Bio and CJ Seafood

The main advantage of trading using opposite Access Bio and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Bio 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.

The idea behind Access Bio and CJ Seafood Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..