Correlation Between Sumitomo Mitsui and SCOR SE
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and SCOR SE 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 SCOR SE 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 SCOR SE, you can compare the effects of market volatilities on Sumitomo Mitsui and SCOR SE 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 SCOR SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and SCOR SE.
Diversification Opportunities for Sumitomo Mitsui and SCOR SE
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sumitomo and SCOR is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction and SCOR SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR SE 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 SCOR SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR SE has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and SCOR SE go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and SCOR SE
Assuming the 90 days horizon Sumitomo Mitsui Construction is expected to generate 1.42 times more return on investment than SCOR SE. However, Sumitomo Mitsui is 1.42 times more volatile than SCOR SE. It trades about 0.21 of its potential returns per unit of risk. SCOR SE is currently generating about -0.09 per unit of risk. If you would invest 228.00 in Sumitomo Mitsui Construction on September 23, 2024 and sell it today you would earn a total of 20.00 from holding Sumitomo Mitsui Construction or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. SCOR SE
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| SCOR SE |
Sumitomo Mitsui and SCOR SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and SCOR SE
The main advantage of trading using opposite Sumitomo Mitsui and SCOR SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, SCOR SE 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 SCOR SE will offset losses from the drop in SCOR SE's long position.| Sumitomo Mitsui vs. APPLIED MATERIALS | Sumitomo Mitsui vs. Cogent Communications Holdings | Sumitomo Mitsui vs. Mobilezone Holding AG | Sumitomo Mitsui vs. Highlight Communications AG |
| SCOR SE vs. Titan Machinery | SCOR SE vs. Australian Agricultural | SCOR SE vs. Sumitomo Mitsui Construction | SCOR SE vs. SPORT LISBOA E |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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