Correlation Between Sempio Foods and Kiwoom
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and Kiwoom 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 Kiwoom 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 Kiwoom, you can compare the effects of market volatilities on Sempio Foods and Kiwoom 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 Kiwoom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and Kiwoom.
Diversification Opportunities for Sempio Foods and Kiwoom
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sempio and Kiwoom is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and Kiwoom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kiwoom 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 Kiwoom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kiwoom has no effect on the direction of Sempio Foods i.e., Sempio Foods and Kiwoom go up and down completely randomly.
Pair Corralation between Sempio Foods and Kiwoom
Assuming the 90 days trading horizon Sempio Foods Co is expected to under-perform the Kiwoom. In addition to that, Sempio Foods is 1.0 times more volatile than Kiwoom. It trades about -0.04 of its total potential returns per unit of risk. Kiwoom is currently generating about 0.0 per unit of volatility. If you would invest 12,190,000 in Kiwoom on September 14, 2024 and sell it today you would lose (140,000) from holding Kiwoom or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sempio Foods Co vs. Kiwoom
Performance |
| Timeline |
| Sempio Foods |
| Kiwoom |
Sempio Foods and Kiwoom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and Kiwoom
The main advantage of trading using opposite Sempio Foods and Kiwoom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, Kiwoom 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 Kiwoom will offset losses from the drop in Kiwoom'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 |
| Kiwoom vs. KB Financial Group | Kiwoom vs. Shinhan Financial Group | Kiwoom vs. Hana Financial | Kiwoom vs. Woori Financial Group |
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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