Correlation Between Sumitomo Dainippon and Hypera SA
Can any of the company-specific risk be diversified away by investing in both Sumitomo Dainippon and Hypera SA 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 Dainippon and Hypera SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Dainippon Pharma and Hypera SA, you can compare the effects of market volatilities on Sumitomo Dainippon and Hypera SA 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 Dainippon with a short position of Hypera SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Dainippon and Hypera SA.
Diversification Opportunities for Sumitomo Dainippon and Hypera SA
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Hypera is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Dainippon Pharma and Hypera SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hypera SA and Sumitomo Dainippon 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 Dainippon Pharma are associated (or correlated) with Hypera SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hypera SA has no effect on the direction of Sumitomo Dainippon i.e., Sumitomo Dainippon and Hypera SA go up and down completely randomly.
Pair Corralation between Sumitomo Dainippon and Hypera SA
Assuming the 90 days horizon Sumitomo Dainippon Pharma is expected to under-perform the Hypera SA. In addition to that, Sumitomo Dainippon is 1.55 times more volatile than Hypera SA. It trades about -0.65 of its total potential returns per unit of risk. Hypera SA is currently generating about -0.06 per unit of volatility. If you would invest 770.00 in Hypera SA on August 26, 2024 and sell it today you would lose (427.00) from holding Hypera SA or give up 55.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.43% |
| Values | Daily Returns |
Sumitomo Dainippon Pharma vs. Hypera SA
Performance |
| Timeline |
| Sumitomo Dainippon Pharma |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hypera SA |
Sumitomo Dainippon and Hypera SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Dainippon and Hypera SA
The main advantage of trading using opposite Sumitomo Dainippon and Hypera SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Dainippon position performs unexpectedly, Hypera SA 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 Hypera SA will offset losses from the drop in Hypera SA's long position.| Sumitomo Dainippon vs. Hypera SA | Sumitomo Dainippon vs. YourWay Cannabis Brands | Sumitomo Dainippon vs. Cumberland Pharmaceuticals | Sumitomo Dainippon vs. Genomma Lab Internacional |
| Hypera SA vs. Green Cures Botanical | Hypera SA vs. Galexxy Holdings | Hypera SA vs. Indoor Harvest Corp | Hypera SA vs. Speakeasy Cannabis Club |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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