Correlation Between Sumitomo Mitsui and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Gladstone Investment 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 Sumitomo Mitsui and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Mitsui Construction and Gladstone Investment, you can compare the effects of market volatilities on Sumitomo Mitsui and Gladstone Investment 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 Sumitomo Mitsui with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Gladstone Investment.
Diversification Opportunities for Sumitomo Mitsui and Gladstone Investment
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and Gladstone is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Sumitomo Mitsui 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 Sumitomo Mitsui Construction are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Gladstone Investment go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Gladstone Investment
Assuming the 90 days horizon Sumitomo Mitsui Construction is expected to generate 1.43 times more return on investment than Gladstone Investment. However, Sumitomo Mitsui is 1.43 times more volatile than Gladstone Investment. It trades about 0.19 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.05 per unit of risk. If you would invest 230.00 in Sumitomo Mitsui Construction on September 12, 2024 and sell it today you would earn a total of 20.00 from holding Sumitomo Mitsui Construction or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. Gladstone Investment
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| Gladstone Investment |
Sumitomo Mitsui and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Gladstone Investment
The main advantage of trading using opposite Sumitomo Mitsui and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| Sumitomo Mitsui vs. GUARDANT HEALTH CL | Sumitomo Mitsui vs. STMICROELECTRONICS | Sumitomo Mitsui vs. Methode Electronics | Sumitomo Mitsui vs. ELECTRONIC ARTS |
| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers ShortDAX | Gladstone Investment vs. Xtrackers LevDAX |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |