Correlation Between Sempio Foods and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on Sempio Foods and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and Alton Sports.
Diversification Opportunities for Sempio Foods and Alton Sports
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sempio and Alton is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Sempio Foods i.e., Sempio Foods and Alton Sports go up and down completely randomly.
Pair Corralation between Sempio Foods and Alton Sports
Assuming the 90 days trading horizon Sempio Foods Co is expected to generate 1.59 times more return on investment than Alton Sports. However, Sempio Foods is 1.59 times more volatile than Alton Sports CoLtd. It trades about 0.0 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.13 per unit of risk. If you would invest 2,995,000 in Sempio Foods Co on September 4, 2024 and sell it today you would lose (465,000) from holding Sempio Foods Co or give up 15.53% 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. Alton Sports CoLtd
Performance |
| Timeline |
| Sempio Foods |
| Alton Sports CoLtd |
Sempio Foods and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and Alton Sports
The main advantage of trading using opposite Sempio Foods and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Sempio Foods vs. Jin Air Co | Sempio Foods vs. Jeju Air Co | Sempio Foods vs. CG Hi Tech | Sempio Foods vs. Aprogen Healthcare Games |
| Alton Sports vs. Korea Real Estate | Alton Sports vs. Busan Industrial Co | Alton Sports vs. UNISEM Co | Alton Sports vs. RPBio Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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