Correlation Between Sumitomo Mitsui and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and KENEDIX 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 KENEDIX 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 KENEDIX OFFICE INV, you can compare the effects of market volatilities on Sumitomo Mitsui and KENEDIX 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 KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and KENEDIX OFFICE.
Diversification Opportunities for Sumitomo Mitsui and KENEDIX OFFICE
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sumitomo and KENEDIX is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and KENEDIX OFFICE
Assuming the 90 days horizon Sumitomo Mitsui is expected to generate 1.74 times less return on investment than KENEDIX OFFICE. In addition to that, Sumitomo Mitsui is 1.05 times more volatile than KENEDIX OFFICE INV. It trades about 0.09 of its total potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about 0.16 per unit of volatility. If you would invest 90,500 in KENEDIX OFFICE INV on November 4, 2024 and sell it today you would earn a total of 4,000 from holding KENEDIX OFFICE INV or generate 4.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| KENEDIX OFFICE INV |
Sumitomo Mitsui and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and KENEDIX OFFICE
The main advantage of trading using opposite Sumitomo Mitsui and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, KENEDIX 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| Sumitomo Mitsui vs. FAST RETAIL ADR | Sumitomo Mitsui vs. GREENX METALS LTD | Sumitomo Mitsui vs. Nippon Light Metal | Sumitomo Mitsui vs. FLOW TRADERS LTD |
| KENEDIX OFFICE vs. Aristocrat Leisure Limited | KENEDIX OFFICE vs. NORTHEAST UTILITIES | KENEDIX OFFICE vs. Air Transport Services | KENEDIX OFFICE vs. FIREWEED METALS P |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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