Correlation Between Sempio Foods and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and Asiana Airlines 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 Asiana Airlines 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 Asiana Airlines, you can compare the effects of market volatilities on Sempio Foods and Asiana Airlines 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 Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and Asiana Airlines.
Diversification Opportunities for Sempio Foods and Asiana Airlines
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sempio and Asiana is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines 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 Asiana Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiana Airlines has no effect on the direction of Sempio Foods i.e., Sempio Foods and Asiana Airlines go up and down completely randomly.
Pair Corralation between Sempio Foods and Asiana Airlines
Assuming the 90 days trading horizon Sempio Foods Co is expected to generate 1.66 times more return on investment than Asiana Airlines. However, Sempio Foods is 1.66 times more volatile than Asiana Airlines. It trades about -0.01 of its potential returns per unit of risk. Asiana Airlines is currently generating about -0.03 per unit of risk. If you would invest 3,470,000 in Sempio Foods Co on October 27, 2024 and sell it today you would lose (1,075,000) from holding Sempio Foods Co or give up 30.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sempio Foods Co vs. Asiana Airlines
Performance |
| Timeline |
| Sempio Foods |
| Asiana Airlines |
Sempio Foods and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and Asiana Airlines
The main advantage of trading using opposite Sempio Foods and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, Asiana Airlines 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 Asiana Airlines will offset losses from the drop in Asiana Airlines' long position.| Sempio Foods vs. DB Financial Investment | Sempio Foods vs. Seoam Machinery Industry | Sempio Foods vs. Keyang Electric Machinery | Sempio Foods vs. Korea Investment Holdings |
| Asiana Airlines vs. ABOV Semiconductor Co | Asiana Airlines vs. Lion Chemtech Co | Asiana Airlines vs. LG Household Healthcare | Asiana Airlines vs. Ssangyong Information Communication |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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