Correlation Between Sempio Foods and DONGKUK TED
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and DONGKUK TED 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 DONGKUK TED 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 DONGKUK TED METAL, you can compare the effects of market volatilities on Sempio Foods and DONGKUK TED 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 DONGKUK TED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and DONGKUK TED.
Diversification Opportunities for Sempio Foods and DONGKUK TED
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sempio and DONGKUK is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL 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 DONGKUK TED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of Sempio Foods i.e., Sempio Foods and DONGKUK TED go up and down completely randomly.
Pair Corralation between Sempio Foods and DONGKUK TED
Assuming the 90 days trading horizon Sempio Foods Co is expected to under-perform the DONGKUK TED. But the stock apears to be less risky and, when comparing its historical volatility, Sempio Foods Co is 1.05 times less risky than DONGKUK TED. The stock trades about -0.15 of its potential returns per unit of risk. The DONGKUK TED METAL is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 596,000 in DONGKUK TED METAL on November 1, 2024 and sell it today you would earn a total of 38,000 from holding DONGKUK TED METAL or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sempio Foods Co vs. DONGKUK TED METAL
Performance |
| Timeline |
| Sempio Foods |
| DONGKUK TED METAL |
Sempio Foods and DONGKUK TED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and DONGKUK TED
The main advantage of trading using opposite Sempio Foods and DONGKUK TED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, DONGKUK TED 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 DONGKUK TED will offset losses from the drop in DONGKUK TED's long position.| Sempio Foods vs. AeroSpace Technology of | Sempio Foods vs. Ilji Technology Co | Sempio Foods vs. Dongnam Chemical Co | Sempio Foods vs. Polaris Office Corp |
| DONGKUK TED vs. Sempio Foods Co | DONGKUK TED vs. EV Advanced Material | DONGKUK TED vs. Hana Materials | DONGKUK TED vs. LAKE MATERIALS LTD |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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