Correlation Between Woori Technology and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both Woori Technology 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 Woori Technology and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woori Technology Investment and Sempio Foods Co, you can compare the effects of market volatilities on Woori Technology 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 Woori Technology with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woori Technology and Sempio Foods.
Diversification Opportunities for Woori Technology and Sempio Foods
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woori and Sempio is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Woori Technology Investment and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and Woori Technology 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 Woori Technology Investment 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 Woori Technology i.e., Woori Technology and Sempio Foods go up and down completely randomly.
Pair Corralation between Woori Technology and Sempio Foods
Assuming the 90 days trading horizon Woori Technology Investment is expected to generate 2.73 times more return on investment than Sempio Foods. However, Woori Technology is 2.73 times more volatile than Sempio Foods Co. It trades about -0.07 of its potential returns per unit of risk. Sempio Foods Co is currently generating about -0.25 per unit of risk. If you would invest 964,000 in Woori Technology Investment on August 31, 2024 and sell it today you would lose (95,000) from holding Woori Technology Investment or give up 9.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woori Technology Investment vs. Sempio Foods Co
Performance |
| Timeline |
| Woori Technology Inv |
| Sempio Foods |
Woori Technology and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woori Technology and Sempio Foods
The main advantage of trading using opposite Woori Technology and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woori Technology 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.| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV Co |
| Sempio Foods vs. Cots Technology Co | Sempio Foods vs. Taeyang Metal Industrial | Sempio Foods vs. Hanjoo Light Metal | Sempio Foods vs. Amogreentech Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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