Correlation Between INtRON Biotechnology and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology 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 INtRON Biotechnology and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and Sempio Foods Co, you can compare the effects of market volatilities on INtRON Biotechnology 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 INtRON Biotechnology with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and Sempio Foods.
Diversification Opportunities for INtRON Biotechnology and Sempio Foods
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INtRON and Sempio is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and INtRON Biotechnology 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 iNtRON Biotechnology 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 INtRON Biotechnology i.e., INtRON Biotechnology and Sempio Foods go up and down completely randomly.
Pair Corralation between INtRON Biotechnology and Sempio Foods
Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 1.09 times more return on investment than Sempio Foods. However, INtRON Biotechnology is 1.09 times more volatile than Sempio Foods Co. It trades about -0.09 of its potential returns per unit of risk. Sempio Foods Co is currently generating about -0.2 per unit of risk. If you would invest 587,000 in iNtRON Biotechnology on August 25, 2024 and sell it today you would lose (26,000) from holding iNtRON Biotechnology or give up 4.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iNtRON Biotechnology vs. Sempio Foods Co
Performance |
| Timeline |
| iNtRON Biotechnology |
| Sempio Foods |
INtRON Biotechnology and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INtRON Biotechnology and Sempio Foods
The main advantage of trading using opposite INtRON Biotechnology and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology 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.| INtRON Biotechnology vs. Medy Tox | INtRON Biotechnology vs. Oscotec | INtRON Biotechnology vs. Genexine | INtRON Biotechnology vs. Helixmith Co |
| Sempio Foods vs. Tway Air Co | Sempio Foods vs. DB Insurance Co | Sempio Foods vs. Daejung Chemicals Metals | Sempio Foods vs. Ssangyong Materials 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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