Correlation Between Hanjoo Light and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both Hanjoo Light 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 Hanjoo Light and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjoo Light Metal and Sempio Foods Co, you can compare the effects of market volatilities on Hanjoo Light 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 Hanjoo Light with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjoo Light and Sempio Foods.
Diversification Opportunities for Hanjoo Light and Sempio Foods
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hanjoo and Sempio is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hanjoo Light Metal and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and Hanjoo Light 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 Hanjoo Light Metal 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 Hanjoo Light i.e., Hanjoo Light and Sempio Foods go up and down completely randomly.
Pair Corralation between Hanjoo Light and Sempio Foods
Assuming the 90 days trading horizon Hanjoo Light Metal is expected to under-perform the Sempio Foods. In addition to that, Hanjoo Light is 1.29 times more volatile than Sempio Foods Co. It trades about -0.2 of its total potential returns per unit of risk. Sempio Foods Co is currently generating about -0.09 per unit of volatility. If you would invest 2,830,000 in Sempio Foods Co on September 2, 2024 and sell it today you would lose (260,000) from holding Sempio Foods Co or give up 9.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjoo Light Metal vs. Sempio Foods Co
Performance |
| Timeline |
| Hanjoo Light Metal |
| Sempio Foods |
Hanjoo Light and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjoo Light and Sempio Foods
The main advantage of trading using opposite Hanjoo Light and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjoo Light 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.| Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. Samsung Electronics Co | Hanjoo Light vs. LG Energy Solution | Hanjoo Light vs. SK Hynix |
| Sempio Foods vs. Korea Real Estate | Sempio Foods vs. Korea Ratings Co | Sempio Foods vs. IQuest Co | Sempio Foods vs. Wonbang Tech 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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