Correlation Between Suncorp Group and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Suncorp Group and COFCO Joycome 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 Suncorp Group and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncorp Group Limited and COFCO Joycome Foods, you can compare the effects of market volatilities on Suncorp Group and COFCO Joycome 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 Suncorp Group with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncorp Group and COFCO Joycome.
Diversification Opportunities for Suncorp Group and COFCO Joycome
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Suncorp and COFCO is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Suncorp Group Limited and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Suncorp Group 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 Suncorp Group Limited are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Suncorp Group i.e., Suncorp Group and COFCO Joycome go up and down completely randomly.
Pair Corralation between Suncorp Group and COFCO Joycome
Assuming the 90 days horizon Suncorp Group is expected to generate 2.48 times less return on investment than COFCO Joycome. But when comparing it to its historical volatility, Suncorp Group Limited is 1.98 times less risky than COFCO Joycome. It trades about 0.07 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 17.00 in COFCO Joycome Foods on September 13, 2024 and sell it today you would earn a total of 1.00 from holding COFCO Joycome Foods or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Suncorp Group Limited vs. COFCO Joycome Foods
Performance |
| Timeline |
| Suncorp Group Limited |
| COFCO Joycome Foods |
Suncorp Group and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suncorp Group and COFCO Joycome
The main advantage of trading using opposite Suncorp Group and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncorp Group position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| Suncorp Group vs. COFCO Joycome Foods | Suncorp Group vs. Cass Information Systems | Suncorp Group vs. MOLSON RS BEVERAGE | Suncorp Group vs. Collins Foods Limited |
| COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. SIVERS SEMICONDUCTORS AB | COFCO Joycome vs. NorAm Drilling AS |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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