Correlation Between Advantest and Sumco Corp
Can any of the company-specific risk be diversified away by investing in both Advantest and Sumco Corp 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 Advantest and Sumco Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantest and Sumco Corp ADR, you can compare the effects of market volatilities on Advantest and Sumco Corp 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 Advantest with a short position of Sumco Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantest and Sumco Corp.
Diversification Opportunities for Advantest and Sumco Corp
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advantest and Sumco is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Advantest and Sumco Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumco Corp ADR and Advantest 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 Advantest are associated (or correlated) with Sumco Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumco Corp ADR has no effect on the direction of Advantest i.e., Advantest and Sumco Corp go up and down completely randomly.
Pair Corralation between Advantest and Sumco Corp
Assuming the 90 days horizon Advantest is expected to under-perform the Sumco Corp. In addition to that, Advantest is 1.94 times more volatile than Sumco Corp ADR. It trades about -0.08 of its total potential returns per unit of risk. Sumco Corp ADR is currently generating about 0.02 per unit of volatility. If you would invest 1,475 in Sumco Corp ADR on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Sumco Corp ADR or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advantest vs. Sumco Corp ADR
Performance |
| Timeline |
| Advantest |
| Sumco Corp ADR |
Advantest and Sumco Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantest and Sumco Corp
The main advantage of trading using opposite Advantest and Sumco Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantest position performs unexpectedly, Sumco Corp 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 Sumco Corp will offset losses from the drop in Sumco Corp's long position.| Advantest vs. Tokyo Electron | Advantest vs. Ultra Clean Holdings | Advantest vs. Applied Materials | Advantest vs. Sumco Corp ADR |
| Sumco Corp vs. Lasertec | Sumco Corp vs. Asm Pacific Technology | Sumco Corp vs. Disco Corp ADR | Sumco Corp vs. Tokyo Electron |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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