Correlation Between Datang International and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both Datang International 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 Datang International and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datang International Power and Sumitomo Mitsui Construction, you can compare the effects of market volatilities on Datang International 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 Datang International with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datang International and Sumitomo Mitsui.
Diversification Opportunities for Datang International and Sumitomo Mitsui
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Datang and Sumitomo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Datang International Power and Sumitomo Mitsui Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Cons and Datang International 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 Datang International Power 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 Cons has no effect on the direction of Datang International i.e., Datang International and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between Datang International and Sumitomo Mitsui
Assuming the 90 days horizon Datang International Power is expected to under-perform the Sumitomo Mitsui. In addition to that, Datang International is 2.53 times more volatile than Sumitomo Mitsui Construction. It trades about -0.06 of its total potential returns per unit of risk. Sumitomo Mitsui Construction is currently generating about 0.06 per unit of volatility. If you would invest 248.00 in Sumitomo Mitsui Construction on November 2, 2024 and sell it today you would earn a total of 4.00 from holding Sumitomo Mitsui Construction or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datang International Power vs. Sumitomo Mitsui Construction
Performance |
| Timeline |
| Datang International |
| Sumitomo Mitsui Cons |
Datang International and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datang International and Sumitomo Mitsui
The main advantage of trading using opposite Datang International and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datang International 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.| Datang International vs. Columbia Sportswear | Datang International vs. Playtech plc | Datang International vs. Kaiser Aluminum | Datang International vs. Fortescue Metals Group |
| Sumitomo Mitsui vs. Nanjing Panda Electronics | Sumitomo Mitsui vs. Methode Electronics | Sumitomo Mitsui vs. Monster Beverage Corp | Sumitomo Mitsui vs. The Boston Beer |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |