Correlation Between Sempio Foods and JETEMA
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and JETEMA 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 JETEMA 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 JETEMA Co, you can compare the effects of market volatilities on Sempio Foods and JETEMA 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 JETEMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and JETEMA.
Diversification Opportunities for Sempio Foods and JETEMA
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sempio and JETEMA is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and JETEMA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JETEMA 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 JETEMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JETEMA has no effect on the direction of Sempio Foods i.e., Sempio Foods and JETEMA go up and down completely randomly.
Pair Corralation between Sempio Foods and JETEMA
Assuming the 90 days trading horizon Sempio Foods Co is expected to generate 1.08 times more return on investment than JETEMA. However, Sempio Foods is 1.08 times more volatile than JETEMA Co. It trades about 0.01 of its potential returns per unit of risk. JETEMA Co is currently generating about -0.02 per unit of risk. If you would invest 2,881,125 in Sempio Foods Co on November 30, 2024 and sell it today you would lose (216,125) from holding Sempio Foods Co or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sempio Foods Co vs. JETEMA Co
Performance |
| Timeline |
| Sempio Foods |
| JETEMA |
Sempio Foods and JETEMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and JETEMA
The main advantage of trading using opposite Sempio Foods and JETEMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, JETEMA 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 JETEMA will offset losses from the drop in JETEMA's long position.| Sempio Foods vs. Hanwha Chemical Corp | Sempio Foods vs. Nice Information Telecommunication | Sempio Foods vs. KPX Green Chemical | Sempio Foods vs. Hansol Chemical Co |
| JETEMA vs. Ssangyong Information Communication | JETEMA vs. Automobile Pc | JETEMA vs. Mobile Appliance | JETEMA vs. Guyoung Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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