Correlation Between Sumitomo Mitsui and SITKA GOLD
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and SITKA GOLD 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 SITKA GOLD 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 SITKA GOLD P, you can compare the effects of market volatilities on Sumitomo Mitsui and SITKA GOLD 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 SITKA GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and SITKA GOLD.
Diversification Opportunities for Sumitomo Mitsui and SITKA GOLD
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sumitomo and SITKA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction and SITKA GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITKA GOLD P 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 SITKA GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITKA GOLD P has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and SITKA GOLD go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and SITKA GOLD
Assuming the 90 days horizon Sumitomo Mitsui Construction is expected to generate 0.34 times more return on investment than SITKA GOLD. However, Sumitomo Mitsui Construction is 2.93 times less risky than SITKA GOLD. It trades about 0.11 of its potential returns per unit of risk. SITKA GOLD P is currently generating about -0.06 per unit of risk. If you would invest 230.00 in Sumitomo Mitsui Construction on September 1, 2024 and sell it today you would earn a total of 10.00 from holding Sumitomo Mitsui Construction or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. SITKA GOLD P
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| SITKA GOLD P |
Sumitomo Mitsui and SITKA GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and SITKA GOLD
The main advantage of trading using opposite Sumitomo Mitsui and SITKA GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, SITKA GOLD 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 SITKA GOLD will offset losses from the drop in SITKA GOLD's long position.| Sumitomo Mitsui vs. SIVERS SEMICONDUCTORS AB | Sumitomo Mitsui vs. Darden Restaurants | Sumitomo Mitsui vs. Reliance Steel Aluminum | Sumitomo Mitsui vs. Q2M Managementberatung AG |
| SITKA GOLD vs. Gaztransport Technigaz SA | SITKA GOLD vs. Micron Technology | SITKA GOLD vs. Air Transport Services | SITKA GOLD vs. Transport International Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |