Correlation Between Sung Bo and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Sempio Foods 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 Sung Bo and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and Sempio Foods Co, you can compare the effects of market volatilities on Sung Bo and Sempio Foods 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 Sung Bo with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Sempio Foods.
Diversification Opportunities for Sung Bo and Sempio Foods
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sung and Sempio is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with Sempio Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sempio Foods has no effect on the direction of Sung Bo i.e., Sung Bo and Sempio Foods go up and down completely randomly.
Pair Corralation between Sung Bo and Sempio Foods
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to generate 0.57 times more return on investment than Sempio Foods. However, Sung Bo Chemicals is 1.74 times less risky than Sempio Foods. It trades about 0.21 of its potential returns per unit of risk. Sempio Foods Co is currently generating about -0.02 per unit of risk. If you would invest 242,157 in Sung Bo Chemicals on October 17, 2024 and sell it today you would earn a total of 10,843 from holding Sung Bo Chemicals or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Sempio Foods Co
Performance |
| Timeline |
| Sung Bo Chemicals |
| Sempio Foods |
Sung Bo and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Sempio Foods
The main advantage of trading using opposite Sung Bo and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Sempio Foods 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 Sempio Foods will offset losses from the drop in Sempio Foods' long position.| Sung Bo vs. Moonbae Steel | Sung Bo vs. Nature and Environment | Sung Bo vs. Hankukpackage Co | Sung Bo vs. Polaris Office Corp |
| Sempio Foods vs. Sung Bo Chemicals | Sempio Foods vs. Daejung Chemicals Metals | Sempio Foods vs. SS TECH | Sempio Foods vs. Miwon Chemical |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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