Correlation Between Keyang Electric and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both Keyang Electric 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 Keyang Electric and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyang Electric Machinery and Sempio Foods Co, you can compare the effects of market volatilities on Keyang Electric 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 Keyang Electric with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyang Electric and Sempio Foods.
Diversification Opportunities for Keyang Electric and Sempio Foods
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Keyang and Sempio is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Keyang Electric Machinery and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and Keyang Electric 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 Keyang Electric Machinery 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 Keyang Electric i.e., Keyang Electric and Sempio Foods go up and down completely randomly.
Pair Corralation between Keyang Electric and Sempio Foods
Assuming the 90 days trading horizon Keyang Electric Machinery is expected to generate 1.22 times more return on investment than Sempio Foods. However, Keyang Electric is 1.22 times more volatile than Sempio Foods Co. It trades about 0.03 of its potential returns per unit of risk. Sempio Foods Co is currently generating about -0.07 per unit of risk. If you would invest 398,500 in Keyang Electric Machinery on October 14, 2024 and sell it today you would earn a total of 10,500 from holding Keyang Electric Machinery or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyang Electric Machinery vs. Sempio Foods Co
Performance |
| Timeline |
| Keyang Electric Machinery |
| Sempio Foods |
Keyang Electric and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyang Electric and Sempio Foods
The main advantage of trading using opposite Keyang Electric and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyang Electric 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.| Keyang Electric vs. Samyung Trading Co | Keyang Electric vs. Coloray International Investment | Keyang Electric vs. Korea Investment Holdings | Keyang Electric vs. E Investment Development |
| Sempio Foods vs. Aprogen Healthcare Games | Sempio Foods vs. LG Household Healthcare | Sempio Foods vs. Global Standard Technology | Sempio Foods vs. SeAH Besteel Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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