Correlation Between Sumitomo Mitsui and Takkt AG
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Takkt AG 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 Takkt AG 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 Takkt AG, you can compare the effects of market volatilities on Sumitomo Mitsui and Takkt AG 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 Takkt AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Takkt AG.
Diversification Opportunities for Sumitomo Mitsui and Takkt AG
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumitomo and Takkt is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Construction and Takkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takkt AG 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 Takkt AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takkt AG has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Takkt AG go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Takkt AG
Assuming the 90 days horizon Sumitomo Mitsui Construction is expected to generate 0.82 times more return on investment than Takkt AG. However, Sumitomo Mitsui Construction is 1.21 times less risky than Takkt AG. It trades about -0.02 of its potential returns per unit of risk. Takkt AG is currently generating about -0.04 per unit of risk. If you would invest 286.00 in Sumitomo Mitsui Construction on August 31, 2024 and sell it today you would lose (52.00) from holding Sumitomo Mitsui Construction or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Sumitomo Mitsui Construction vs. Takkt AG
Performance |
| Timeline |
| Sumitomo Mitsui Cons |
| Takkt AG |
Sumitomo Mitsui and Takkt AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Takkt AG
The main advantage of trading using opposite Sumitomo Mitsui and Takkt AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Takkt AG 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 Takkt AG will offset losses from the drop in Takkt AG'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 |
| Takkt AG vs. Gaztransport Technigaz SA | Takkt AG vs. Texas Roadhouse | Takkt AG vs. Sumitomo Mitsui Construction | Takkt AG vs. Nufarm Limited |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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