Correlation Between Sempio Foods and Woori Financial
Can any of the company-specific risk be diversified away by investing in both Sempio Foods and Woori Financial 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 Woori Financial 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 Woori Financial Group, you can compare the effects of market volatilities on Sempio Foods and Woori Financial 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 Woori Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sempio Foods and Woori Financial.
Diversification Opportunities for Sempio Foods and Woori Financial
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sempio and Woori is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sempio Foods Co and Woori Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Financial Group 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 Woori Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Financial Group has no effect on the direction of Sempio Foods i.e., Sempio Foods and Woori Financial go up and down completely randomly.
Pair Corralation between Sempio Foods and Woori Financial
Assuming the 90 days trading horizon Sempio Foods Co is expected to generate 1.49 times more return on investment than Woori Financial. However, Sempio Foods is 1.49 times more volatile than Woori Financial Group. It trades about -0.04 of its potential returns per unit of risk. Woori Financial Group is currently generating about -0.15 per unit of risk. If you would invest 2,610,000 in Sempio Foods Co on September 26, 2024 and sell it today you would lose (95,000) from holding Sempio Foods Co or give up 3.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sempio Foods Co vs. Woori Financial Group
Performance |
Timeline |
Sempio Foods |
Woori Financial Group |
Sempio Foods and Woori Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sempio Foods and Woori Financial
The main advantage of trading using opposite Sempio Foods and Woori Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sempio Foods position performs unexpectedly, Woori Financial 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 Woori Financial will offset losses from the drop in Woori Financial's long position.Sempio Foods vs. SEOJEON ELECTRIC MACHINERY | Sempio Foods vs. Keyang Electric Machinery | Sempio Foods vs. Seoam Machinery Industry | Sempio Foods vs. KakaoBank Corp |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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