Correlation Between Sempio Foods and CKH Food
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and CKH Food 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 CKH Food 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 CKH Food Health, you can compare the effects of market volatilities on Sempio Foods and CKH Food 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 CKH Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and CKH Food.
Diversification Opportunities for Sempio Foods and CKH Food
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sempio and CKH is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and CKH Food Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKH Food Health 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 CKH Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKH Food Health has no effect on the direction of Sempio Foods i.e., Sempio Foods and CKH Food go up and down completely randomly.
Pair Corralation between Sempio Foods and CKH Food
Assuming the 90 days trading horizon Sempio Foods Co is expected to generate 0.95 times more return on investment than CKH Food. However, Sempio Foods Co is 1.05 times less risky than CKH Food. It trades about 0.0 of its potential returns per unit of risk. CKH Food Health is currently generating about -0.06 per unit of risk. If you would invest 3,311,133 in Sempio Foods Co on August 25, 2024 and sell it today you would lose (711,133) from holding Sempio Foods Co or give up 21.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sempio Foods Co vs. CKH Food Health
Performance |
| Timeline |
| Sempio Foods |
| CKH Food Health |
Sempio Foods and CKH Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sempio Foods and CKH Food
The main advantage of trading using opposite Sempio Foods and CKH Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, CKH Food 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 CKH Food will offset losses from the drop in CKH Food's long position.| Sempio Foods vs. Tway Air Co | Sempio Foods vs. DB Insurance Co | Sempio Foods vs. Daejung Chemicals Metals | Sempio Foods vs. Ssangyong Materials Corp |
| CKH Food vs. AptaBio Therapeutics | CKH Food vs. Daewoo SBI SPAC | CKH Food vs. Dream Security co | CKH Food vs. Microfriend |
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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