Correlation Between COFCO Joycome and Suncorp Group
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Suncorp Group 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 COFCO Joycome and Suncorp Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Suncorp Group Limited, you can compare the effects of market volatilities on COFCO Joycome and Suncorp Group 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 COFCO Joycome with a short position of Suncorp Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Suncorp Group.
Diversification Opportunities for COFCO Joycome and Suncorp Group
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between COFCO and Suncorp is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Suncorp Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncorp Group Limited and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Suncorp Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncorp Group Limited has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Suncorp Group go up and down completely randomly.
Pair Corralation between COFCO Joycome and Suncorp Group
Assuming the 90 days horizon COFCO Joycome Foods is expected to generate 2.0 times more return on investment than Suncorp Group. However, COFCO Joycome is 2.0 times more volatile than Suncorp Group Limited. It trades about 0.05 of its potential returns per unit of risk. Suncorp Group Limited is currently generating about 0.07 per unit of risk. If you would invest 17.00 in COFCO Joycome Foods on September 13, 2024 and sell it today you would earn a total of 1.00 from holding COFCO Joycome Foods or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
COFCO Joycome Foods vs. Suncorp Group Limited
Performance |
| Timeline |
| COFCO Joycome Foods |
| Suncorp Group Limited |
COFCO Joycome and Suncorp Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and Suncorp Group
The main advantage of trading using opposite COFCO Joycome and Suncorp Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Suncorp Group 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 Suncorp Group will offset losses from the drop in Suncorp Group's long position.| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
| Suncorp Group vs. COFCO Joycome Foods | Suncorp Group vs. Cass Information Systems | Suncorp Group vs. MOLSON RS BEVERAGE | Suncorp Group vs. Collins Foods Limited |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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