Correlation Between Sempio Foods and Cloud Air
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and Cloud Air 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 Cloud Air 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 Cloud Air CoLtd, you can compare the effects of market volatilities on Sempio Foods and Cloud Air 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 Cloud Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and Cloud Air.
Diversification Opportunities for Sempio Foods and Cloud Air
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sempio and Cloud is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and Cloud Air CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cloud Air CoLtd 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 Cloud Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cloud Air CoLtd has no effect on the direction of Sempio Foods i.e., Sempio Foods and Cloud Air go up and down completely randomly.
Pair Corralation between Sempio Foods and Cloud Air
Assuming the 90 days trading horizon Sempio Foods Co is expected to under-perform the Cloud Air. In addition to that, Sempio Foods is 1.44 times more volatile than Cloud Air CoLtd. It trades about -0.12 of its total potential returns per unit of risk. Cloud Air CoLtd is currently generating about -0.04 per unit of volatility. If you would invest 85,200 in Cloud Air CoLtd on September 12, 2024 and sell it today you would lose (2,100) from holding Cloud Air CoLtd or give up 2.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sempio Foods Co vs. Cloud Air CoLtd
Performance |
| Timeline |
| Sempio Foods |
| Cloud Air CoLtd |
Sempio Foods and Cloud Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and Cloud Air
The main advantage of trading using opposite Sempio Foods and Cloud Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, Cloud Air 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 Cloud Air will offset losses from the drop in Cloud Air's long position.| Sempio Foods vs. Korea New Network | Sempio Foods vs. ICD Co | Sempio Foods vs. DYPNF CoLtd | Sempio Foods vs. Solution Advanced Technology |
| Cloud Air vs. SK Hynix | Cloud Air vs. People Technology | Cloud Air vs. Hana Materials | Cloud Air vs. SIMMTECH 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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