Correlation Between Sumitomo Mitsui and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and CENTURIA OFFICE 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT, you can compare the effects of market volatilities on Sumitomo Mitsui and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and CENTURIA OFFICE.
Diversification Opportunities for Sumitomo Mitsui and CENTURIA OFFICE
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and CENTURIA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and CENTURIA OFFICE
Assuming the 90 days horizon Sumitomo Mitsui Construction is expected to generate 0.9 times more return on investment than CENTURIA OFFICE. However, Sumitomo Mitsui Construction is 1.11 times less risky than CENTURIA OFFICE. It trades about 0.11 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.01 per unit of risk. If you would invest 246.00 in Sumitomo Mitsui Construction on November 7, 2024 and sell it today you would earn a total of 8.00 from holding Sumitomo Mitsui Construction or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| CENTURIA OFFICE REIT |
Sumitomo Mitsui and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and CENTURIA OFFICE
The main advantage of trading using opposite Sumitomo Mitsui and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| Sumitomo Mitsui vs. UNIVERSAL MUSIC GROUP | Sumitomo Mitsui vs. SBM OFFSHORE | Sumitomo Mitsui vs. Amkor Technology | Sumitomo Mitsui vs. Agilent Technologies |
| CENTURIA OFFICE vs. CN MODERN DAIRY | CENTURIA OFFICE vs. Air Transport Services | CENTURIA OFFICE vs. Texas Roadhouse | CENTURIA OFFICE vs. Axfood AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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