Correlation Between Sempio Foods and Jin Air
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and Jin 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 Jin 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 Jin Air Co, you can compare the effects of market volatilities on Sempio Foods and Jin 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 Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and Jin Air.
Diversification Opportunities for Sempio Foods and Jin Air
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sempio and Jin is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air 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 Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Sempio Foods i.e., Sempio Foods and Jin Air go up and down completely randomly.
Pair Corralation between Sempio Foods and Jin Air
Assuming the 90 days trading horizon Sempio Foods Co is expected to generate 1.36 times more return on investment than Jin Air. However, Sempio Foods is 1.36 times more volatile than Jin Air Co. It trades about -0.01 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.03 per unit of risk. If you would invest 3,480,170 in Sempio Foods Co on September 12, 2024 and sell it today you would lose (1,055,170) from holding Sempio Foods Co or give up 30.32% 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. Jin Air Co
Performance |
| Timeline |
| Sempio Foods |
| Jin Air |
Sempio Foods and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and Jin Air
The main advantage of trading using opposite Sempio Foods and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, Jin 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 Jin Air will offset losses from the drop in Jin 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 |
| Jin Air vs. Air Busan Co | Jin Air vs. Tway Air Co | Jin Air vs. Solution Advanced Technology | Jin Air vs. Busan Industrial 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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