Correlation Between Sempio Foods and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and Kukdo Chemical 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 Sempio Foods and Kukdo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sempio Foods Co and Kukdo Chemical Co, you can compare the effects of market volatilities on Sempio Foods and Kukdo Chemical 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 Sempio Foods with a short position of Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and Kukdo Chemical.
Diversification Opportunities for Sempio Foods and Kukdo Chemical
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sempio and Kukdo is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical and Sempio Foods 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 Sempio Foods Co are associated (or correlated) with Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Sempio Foods i.e., Sempio Foods and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Sempio Foods and Kukdo Chemical
Assuming the 90 days trading horizon Sempio Foods Co is expected to under-perform the Kukdo Chemical. In addition to that, Sempio Foods is 1.12 times more volatile than Kukdo Chemical Co. It trades about -0.25 of its total potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.22 per unit of volatility. If you would invest 3,250,000 in Kukdo Chemical Co on August 31, 2024 and sell it today you would lose (250,000) from holding Kukdo Chemical Co or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sempio Foods Co vs. Kukdo Chemical Co
Performance |
| Timeline |
| Sempio Foods |
| Kukdo Chemical |
Sempio Foods and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and Kukdo Chemical
The main advantage of trading using opposite Sempio Foods and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical's long position.| Sempio Foods vs. Cots Technology Co | Sempio Foods vs. Taeyang Metal Industrial | Sempio Foods vs. Hanjoo Light Metal | Sempio Foods vs. Amogreentech Co |
| Kukdo Chemical vs. Kukdo Chemical | Kukdo Chemical vs. Korea Refract | Kukdo Chemical vs. Korea Refractories Co | Kukdo Chemical vs. Shinhan Inverse WTI |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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