Correlation Between MEDICOX and CJ Seafood

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

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

Diversification Opportunities for MEDICOX and CJ Seafood

0.82

Correlation Coefficient

MEDICOX  CJ Seafood

Very poor diversification

The 3 months correlation between MEDICOX and 011150 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MEDICOX Co 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 MEDICOX 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 MEDICOX Co 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 MEDICOX i.e., MEDICOX and CJ Seafood go up and down completely randomly.

Pair Corralation between MEDICOX and CJ Seafood

Assuming the 90 days trading horizon MEDICOX Co is expected to generate 3.96 times more return on investment than CJ Seafood. However, MEDICOX is 3.96 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 -0.15 per unit of risk. If you would invest  37,500  in MEDICOX Co on August 19, 2024 and sell it today you would lose (4,500) from holding MEDICOX Co or give up 12.0% of portfolio value over 90 days.

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

MEDICOX Co  vs.  CJ Seafood Corp

MEDICOX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDICOX Co 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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

CJ Seafood Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CJ Seafood Corp 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 December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with MEDICOX and CJ Seafood

The main advantage of trading using opposite MEDICOX and CJ Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICOX 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 MEDICOX Co 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.