Correlation Between Sumitomo Mitsui and SEKISUI CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL 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 SEKISUI CHEMICAL, you can compare the effects of market volatilities on Sumitomo Mitsui and SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and SEKISUI CHEMICAL.
Diversification Opportunities for Sumitomo Mitsui and SEKISUI CHEMICAL
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sumitomo and SEKISUI is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI CHEMICAL 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and SEKISUI CHEMICAL go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and SEKISUI CHEMICAL
Assuming the 90 days horizon Sumitomo Mitsui is expected to generate 3.33 times less return on investment than SEKISUI CHEMICAL. In addition to that, Sumitomo Mitsui is 1.04 times more volatile than SEKISUI CHEMICAL. It trades about 0.11 of its total potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about 0.38 per unit of volatility. If you would invest 1,290 in SEKISUI CHEMICAL on September 1, 2024 and sell it today you would earn a total of 210.00 from holding SEKISUI CHEMICAL or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. SEKISUI CHEMICAL
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| SEKISUI CHEMICAL |
Sumitomo Mitsui and SEKISUI CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and SEKISUI CHEMICAL
The main advantage of trading using opposite Sumitomo Mitsui and SEKISUI CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, SEKISUI CHEMICAL 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 SEKISUI CHEMICAL will offset losses from the drop in SEKISUI CHEMICAL'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 |
| SEKISUI CHEMICAL vs. Sumitomo Mitsui Construction | SEKISUI CHEMICAL vs. Hanison Construction Holdings | SEKISUI CHEMICAL vs. Federal Agricultural Mortgage | SEKISUI CHEMICAL vs. Playtech plc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |