Correlation Between G2D Investments and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both G2D Investments 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 G2D Investments and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G2D Investments and Sumitomo Mitsui Financial, you can compare the effects of market volatilities on G2D Investments 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 G2D Investments with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of G2D Investments and Sumitomo Mitsui.
Diversification Opportunities for G2D Investments and Sumitomo Mitsui
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between G2D and Sumitomo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding G2D Investments 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 G2D Investments 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 G2D Investments 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 G2D Investments i.e., G2D Investments and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between G2D Investments and Sumitomo Mitsui
Assuming the 90 days trading horizon G2D Investments is expected to under-perform the Sumitomo Mitsui. In addition to that, G2D Investments is 1.26 times more volatile than Sumitomo Mitsui Financial. It trades about -0.04 of its total potential returns per unit of risk. Sumitomo Mitsui Financial is currently generating about 0.08 per unit of volatility. If you would invest 6,887 in Sumitomo Mitsui Financial on September 1, 2024 and sell it today you would earn a total of 1,525 from holding Sumitomo Mitsui Financial or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.66% |
| Values | Daily Returns |
G2D Investments vs. Sumitomo Mitsui Financial
Performance |
| Timeline |
| G2D Investments |
| Sumitomo Mitsui Financial |
G2D Investments and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G2D Investments and Sumitomo Mitsui
The main advantage of trading using opposite G2D Investments and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G2D Investments 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.| G2D Investments vs. Banco BTG Pactual | G2D Investments vs. Hsi Malls Fundo | G2D Investments vs. Habitat Ii |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |