Correlation Between Sempio Foods and Keyang Electric
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and Keyang Electric 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 Keyang Electric 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 Keyang Electric Machinery, you can compare the effects of market volatilities on Sempio Foods and Keyang Electric 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 Keyang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and Keyang Electric.
Diversification Opportunities for Sempio Foods and Keyang Electric
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sempio and Keyang is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and Keyang Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyang Electric Machinery 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 Keyang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyang Electric Machinery has no effect on the direction of Sempio Foods i.e., Sempio Foods and Keyang Electric go up and down completely randomly.
Pair Corralation between Sempio Foods and Keyang Electric
Assuming the 90 days trading horizon Sempio Foods is expected to generate 26.37 times less return on investment than Keyang Electric. But when comparing it to its historical volatility, Sempio Foods Co is 1.41 times less risky than Keyang Electric. It trades about 0.02 of its potential returns per unit of risk. Keyang Electric Machinery is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 342,000 in Keyang Electric Machinery on October 14, 2024 and sell it today you would earn a total of 67,000 from holding Keyang Electric Machinery or generate 19.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sempio Foods Co vs. Keyang Electric Machinery
Performance |
| Timeline |
| Sempio Foods |
| Keyang Electric Machinery |
Sempio Foods and Keyang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and Keyang Electric
The main advantage of trading using opposite Sempio Foods and Keyang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, Keyang Electric 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 Keyang Electric will offset losses from the drop in Keyang Electric's long position.| Sempio Foods vs. Aprogen Healthcare Games | Sempio Foods vs. LG Household Healthcare | Sempio Foods vs. Global Standard Technology | Sempio Foods vs. SeAH Besteel Corp |
| Keyang Electric vs. Samyung Trading Co | Keyang Electric vs. Coloray International Investment | Keyang Electric vs. Korea Investment Holdings | Keyang Electric vs. E Investment Development |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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