Correlation Between Sumitomo Mitsui and FRACTAL GAMING
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and FRACTAL GAMING 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 FRACTAL GAMING 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 FRACTAL GAMING GROUP, you can compare the effects of market volatilities on Sumitomo Mitsui and FRACTAL GAMING 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 FRACTAL GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and FRACTAL GAMING.
Diversification Opportunities for Sumitomo Mitsui and FRACTAL GAMING
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sumitomo and FRACTAL is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction and FRACTAL GAMING GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRACTAL GAMING GROUP 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 FRACTAL GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRACTAL GAMING GROUP has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and FRACTAL GAMING go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and FRACTAL GAMING
Assuming the 90 days horizon Sumitomo Mitsui is expected to generate 2.84 times less return on investment than FRACTAL GAMING. But when comparing it to its historical volatility, Sumitomo Mitsui Construction is 1.61 times less risky than FRACTAL GAMING. It trades about 0.01 of its potential returns per unit of risk. FRACTAL GAMING GROUP is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 308.00 in FRACTAL GAMING GROUP on October 16, 2024 and sell it today you would lose (5.00) from holding FRACTAL GAMING GROUP or give up 1.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. FRACTAL GAMING GROUP
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| FRACTAL GAMING GROUP |
Sumitomo Mitsui and FRACTAL GAMING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and FRACTAL GAMING
The main advantage of trading using opposite Sumitomo Mitsui and FRACTAL GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, FRACTAL GAMING 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 FRACTAL GAMING will offset losses from the drop in FRACTAL GAMING's long position.| Sumitomo Mitsui vs. EEDUCATION ALBERT AB | Sumitomo Mitsui vs. STRAYER EDUCATION | Sumitomo Mitsui vs. CAREER EDUCATION | Sumitomo Mitsui vs. SLR Investment Corp |
| FRACTAL GAMING vs. Eidesvik Offshore ASA | FRACTAL GAMING vs. MEDICAL FACILITIES NEW | FRACTAL GAMING vs. PT Wintermar Offshore | FRACTAL GAMING vs. China Communications Services |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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