Correlation Between INNOX Advanced and Sempio Foods
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced 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 INNOX Advanced and Sempio Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and Sempio Foods Co, you can compare the effects of market volatilities on INNOX Advanced 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 INNOX Advanced with a short position of Sempio Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Sempio Foods.
Diversification Opportunities for INNOX Advanced and Sempio Foods
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INNOX and Sempio is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Sempio Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sempio Foods and INNOX Advanced 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 INNOX Advanced Materials 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 INNOX Advanced i.e., INNOX Advanced and Sempio Foods go up and down completely randomly.
Pair Corralation between INNOX Advanced and Sempio Foods
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 1.35 times more return on investment than Sempio Foods. However, INNOX Advanced is 1.35 times more volatile than Sempio Foods Co. It trades about 0.38 of its potential returns per unit of risk. Sempio Foods Co is currently generating about 0.06 per unit of risk. If you would invest 1,971,181 in INNOX Advanced Materials on October 12, 2024 and sell it today you would earn a total of 378,819 from holding INNOX Advanced Materials or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Sempio Foods Co
Performance |
| Timeline |
| INNOX Advanced Materials |
| Sempio Foods |
INNOX Advanced and Sempio Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Sempio Foods
The main advantage of trading using opposite INNOX Advanced and Sempio Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced 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.| INNOX Advanced vs. CU Medical Systems | INNOX Advanced vs. PJ Metal Co | INNOX Advanced vs. Seoyon Topmetal Co | INNOX Advanced vs. Hyundai Industrial Co |
| Sempio Foods vs. Samyang Foods Co | Sempio Foods vs. Haitai Confectionery Foods | Sempio Foods vs. Sangsangin Investment Securities | Sempio Foods vs. Hankukpackage 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 Stocks Directory module to find actively traded stocks across global markets.
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