Correlation Between Adecco and Sumitomo Chemical
Can any of the company-specific risk be diversified away by investing in both Adecco and Sumitomo 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 Adecco and Sumitomo Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecco Group and Sumitomo Chemical Co, you can compare the effects of market volatilities on Adecco and Sumitomo 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 Adecco with a short position of Sumitomo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco and Sumitomo Chemical.
Diversification Opportunities for Adecco and Sumitomo Chemical
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Adecco and Sumitomo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group and Sumitomo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Chemical and Adecco 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 Adecco Group are associated (or correlated) with Sumitomo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Chemical has no effect on the direction of Adecco i.e., Adecco and Sumitomo Chemical go up and down completely randomly.
Pair Corralation between Adecco and Sumitomo Chemical
Assuming the 90 days horizon Adecco Group is expected to under-perform the Sumitomo Chemical. In addition to that, Adecco is 1.28 times more volatile than Sumitomo Chemical Co. It trades about -0.35 of its total potential returns per unit of risk. Sumitomo Chemical Co is currently generating about -0.18 per unit of volatility. If you would invest 1,282 in Sumitomo Chemical Co on September 2, 2024 and sell it today you would lose (77.00) from holding Sumitomo Chemical Co or give up 6.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adecco Group vs. Sumitomo Chemical Co
Performance |
| Timeline |
| Adecco Group |
| Sumitomo Chemical |
Adecco and Sumitomo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecco and Sumitomo Chemical
The main advantage of trading using opposite Adecco and Sumitomo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco position performs unexpectedly, Sumitomo 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 Sumitomo Chemical will offset losses from the drop in Sumitomo Chemical's long position.| Adecco vs. The Caldwell Partners | Adecco vs. Futuris Company | Adecco vs. Kelly Services A | Adecco vs. Heidrick Struggles International |
| Sumitomo Chemical vs. BASF SE NA | Sumitomo Chemical vs. Braskem SA Class | Sumitomo Chemical vs. Lsb Industries | Sumitomo Chemical vs. Dow Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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