Correlation Between Kukdo Chemical and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both Kukdo Chemical 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 Kukdo Chemical and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdo Chemical Co and Sempio Foods Co, you can compare the effects of market volatilities on Kukdo Chemical 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 Kukdo Chemical with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdo Chemical and Sempio Foods.
Diversification Opportunities for Kukdo Chemical and Sempio Foods
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kukdo and Sempio is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kukdo Chemical Co and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and Kukdo Chemical 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 Kukdo Chemical Co 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 Kukdo Chemical i.e., Kukdo Chemical and Sempio Foods go up and down completely randomly.
Pair Corralation between Kukdo Chemical and Sempio Foods
Assuming the 90 days trading horizon Kukdo Chemical Co is expected to under-perform the Sempio Foods. But the stock apears to be less risky and, when comparing its historical volatility, Kukdo Chemical Co is 1.09 times less risky than Sempio Foods. The stock trades about -0.3 of its potential returns per unit of risk. The Sempio Foods Co is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 2,885,000 in Sempio Foods Co on August 27, 2024 and sell it today you would lose (285,000) from holding Sempio Foods Co or give up 9.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdo Chemical Co vs. Sempio Foods Co
Performance |
| Timeline |
| Kukdo Chemical |
| Sempio Foods |
Kukdo Chemical and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdo Chemical and Sempio Foods
The main advantage of trading using opposite Kukdo Chemical and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdo Chemical 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.| Kukdo Chemical vs. Digital Multimedia Technology | Kukdo Chemical vs. Iljin Display | Kukdo Chemical vs. Daewon Media Co | Kukdo Chemical vs. Alton Sports CoLtd |
| Sempio Foods vs. Woori Technology Investment | Sempio Foods vs. DB Financial Investment | Sempio Foods vs. Golden Bridge Investment | Sempio Foods vs. SBI Investment KOREA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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