Correlation Between CG Hi and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both CG Hi and Sempio Foods 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 CG Hi and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CG Hi Tech and Sempio Foods Co, you can compare the effects of market volatilities on CG Hi and Sempio Foods 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 CG Hi with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CG Hi and Sempio Foods.
Diversification Opportunities for CG Hi and Sempio Foods
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between 264660 and Sempio is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CG Hi Tech and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and CG Hi 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 CG Hi Tech are associated (or correlated) with Sempio Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sempio Foods has no effect on the direction of CG Hi i.e., CG Hi and Sempio Foods go up and down completely randomly.
Pair Corralation between CG Hi and Sempio Foods
Assuming the 90 days trading horizon CG Hi Tech is expected to under-perform the Sempio Foods. In addition to that, CG Hi is 1.21 times more volatile than Sempio Foods Co. It trades about -0.02 of its total potential returns per unit of risk. Sempio Foods Co is currently generating about 0.0 per unit of volatility. If you would invest 2,740,000 in Sempio Foods Co on September 4, 2024 and sell it today you would lose (115,000) from holding Sempio Foods Co or give up 4.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CG Hi Tech vs. Sempio Foods Co
Performance |
| Timeline |
| CG Hi Tech |
| Sempio Foods |
CG Hi and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CG Hi and Sempio Foods
The main advantage of trading using opposite CG Hi and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CG Hi position performs unexpectedly, Sempio Foods 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 Sempio Foods will offset losses from the drop in Sempio Foods' long position.The idea behind CG Hi Tech and Sempio Foods Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sempio Foods vs. Jin Air Co | Sempio Foods vs. Jeju Air Co | Sempio Foods vs. CG Hi Tech | Sempio Foods vs. Aprogen Healthcare Games |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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