Correlation Between Agilent Technologies and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both Agilent Technologies and Sumitomo Mitsui 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 Agilent Technologies and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agilent Technologies and Sumitomo Mitsui Financial, you can compare the effects of market volatilities on Agilent Technologies and Sumitomo Mitsui 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 Agilent Technologies with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agilent Technologies and Sumitomo Mitsui.
Diversification Opportunities for Agilent Technologies and Sumitomo Mitsui
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Agilent and Sumitomo is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Agilent Technologies and Sumitomo Mitsui Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Financial and Agilent Technologies 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 Agilent Technologies are associated (or correlated) with Sumitomo Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Financial has no effect on the direction of Agilent Technologies i.e., Agilent Technologies and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between Agilent Technologies and Sumitomo Mitsui
Assuming the 90 days trading horizon Agilent Technologies is expected to under-perform the Sumitomo Mitsui. In addition to that, Agilent Technologies is 1.14 times more volatile than Sumitomo Mitsui Financial. It trades about -0.05 of its total potential returns per unit of risk. Sumitomo Mitsui Financial is currently generating about 0.24 per unit of volatility. If you would invest 7,315 in Sumitomo Mitsui Financial on August 24, 2024 and sell it today you would earn a total of 677.00 from holding Sumitomo Mitsui Financial or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agilent Technologies vs. Sumitomo Mitsui Financial
Performance |
| Timeline |
| Agilent Technologies |
| Sumitomo Mitsui Financial |
Agilent Technologies and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agilent Technologies and Sumitomo Mitsui
The main advantage of trading using opposite Agilent Technologies and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agilent Technologies position performs unexpectedly, Sumitomo Mitsui 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 Sumitomo Mitsui will offset losses from the drop in Sumitomo Mitsui's long position.| Agilent Technologies vs. Fras le SA | Agilent Technologies vs. Western Digital | Agilent Technologies vs. Clave Indices De | Agilent Technologies vs. BTG Pactual Logstica |
| Sumitomo Mitsui vs. Mitsubishi UFJ Financial | Sumitomo Mitsui vs. Fras le SA | Sumitomo Mitsui vs. Clave Indices De | Sumitomo Mitsui vs. BTG Pactual Logstica |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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