Correlation Between Miwon Chemical and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both Miwon Chemical 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 Miwon Chemical and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Miwon Chemical and Sempio Foods Co, you can compare the effects of market volatilities on Miwon Chemical 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 Miwon Chemical with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Miwon Chemical and Sempio Foods.
Diversification Opportunities for Miwon Chemical and Sempio Foods
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Miwon and Sempio is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Miwon Chemical and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and Miwon Chemical 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 Miwon Chemical 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 Miwon Chemical i.e., Miwon Chemical and Sempio Foods go up and down completely randomly.
Pair Corralation between Miwon Chemical and Sempio Foods
Assuming the 90 days trading horizon Miwon Chemical is expected to generate 0.64 times more return on investment than Sempio Foods. However, Miwon Chemical is 1.56 times less risky than Sempio Foods. It trades about -0.03 of its potential returns per unit of risk. Sempio Foods Co is currently generating about -0.02 per unit of risk. If you would invest 7,900,000 in Miwon Chemical on October 17, 2024 and sell it today you would lose (60,000) from holding Miwon Chemical or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Miwon Chemical vs. Sempio Foods Co
Performance |
| Timeline |
| Miwon Chemical |
| Sempio Foods |
Miwon Chemical and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Miwon Chemical and Sempio Foods
The main advantage of trading using opposite Miwon Chemical and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Miwon Chemical 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.| Miwon Chemical vs. Lotte Non Life Insurance | Miwon Chemical vs. ABOV Semiconductor Co | Miwon Chemical vs. Samsung Life Insurance | Miwon Chemical vs. Shinhan Financial Group |
| Sempio Foods vs. Sung Bo Chemicals | Sempio Foods vs. Daejung Chemicals Metals | Sempio Foods vs. SS TECH | Sempio Foods vs. Miwon Chemical |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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