Correlation Between Cloud Air and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both Cloud Air 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 Cloud Air and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloud Air CoLtd and Sempio Foods Co, you can compare the effects of market volatilities on Cloud Air 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 Cloud Air with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloud Air and Sempio Foods.
Diversification Opportunities for Cloud Air and Sempio Foods
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cloud and Sempio is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Cloud Air CoLtd and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and Cloud Air 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 Cloud Air CoLtd 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 Cloud Air i.e., Cloud Air and Sempio Foods go up and down completely randomly.
Pair Corralation between Cloud Air and Sempio Foods
Assuming the 90 days trading horizon Cloud Air CoLtd is expected to generate 0.77 times more return on investment than Sempio Foods. However, Cloud Air CoLtd is 1.3 times less risky than Sempio Foods. It trades about -0.05 of its potential returns per unit of risk. Sempio Foods Co is currently generating about -0.11 per unit of risk. If you would invest 90,400 in Cloud Air CoLtd on September 13, 2024 and sell it today you would lose (4,500) from holding Cloud Air CoLtd or give up 4.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cloud Air CoLtd vs. Sempio Foods Co
Performance |
| Timeline |
| Cloud Air CoLtd |
| Sempio Foods |
Cloud Air and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cloud Air and Sempio Foods
The main advantage of trading using opposite Cloud Air and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloud Air 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.| Cloud Air vs. SK Hynix | Cloud Air vs. People Technology | Cloud Air vs. Hana Materials | Cloud Air vs. SIMMTECH Co |
| Sempio Foods vs. Korea New Network | Sempio Foods vs. ICD Co | Sempio Foods vs. DYPNF CoLtd | Sempio Foods vs. Solution Advanced Technology |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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