Correlation Between CME and SEMAFO
Can any of the company-specific risk be diversified away by investing in both CME and SEMAFO 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 CME and SEMAFO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CME Group and SEMAFO Inc, you can compare the effects of market volatilities on CME and SEMAFO 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 CME with a short position of SEMAFO. Check out your portfolio center. Please also check ongoing floating volatility patterns of CME and SEMAFO.
Diversification Opportunities for CME and SEMAFO
Pay attention - limited upside
The 3 months correlation between CME and SEMAFO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CME Group and SEMAFO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEMAFO Inc and CME 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 CME Group are associated (or correlated) with SEMAFO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEMAFO Inc has no effect on the direction of CME i.e., CME and SEMAFO go up and down completely randomly.
Pair Corralation between CME and SEMAFO
If you would invest (100.00) in SEMAFO Inc on January 21, 2024 and sell it today you would earn a total of 100.00 from holding SEMAFO Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
CME Group vs. SEMAFO Inc
Performance |
| Timeline |
| CME Group |
| SEMAFO Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CME and SEMAFO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CME and SEMAFO
The main advantage of trading using opposite CME and SEMAFO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CME position performs unexpectedly, SEMAFO 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 SEMAFO will offset losses from the drop in SEMAFO's long position.The idea behind CME Group and SEMAFO Inc 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.| SEMAFO vs. Sun Country Airlines | SEMAFO vs. Dyadic International | SEMAFO vs. Abcellera BiologicsInc | SEMAFO vs. Valneva SE ADR |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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