Correlation Between GP Investments and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both GP 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 GP 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 GP Investments and Sumitomo Mitsui Financial, you can compare the effects of market volatilities on GP 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 GP Investments with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and Sumitomo Mitsui.
Diversification Opportunities for GP Investments and Sumitomo Mitsui
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GPIV33 and Sumitomo is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GP 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 GP 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 GP 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 GP Investments i.e., GP Investments and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between GP Investments and Sumitomo Mitsui
Assuming the 90 days trading horizon GP Investments is expected to generate 2.12 times less return on investment than Sumitomo Mitsui. In addition to that, GP Investments is 1.66 times more volatile than Sumitomo Mitsui Financial. It trades about 0.02 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 August 30, 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 | 97.64% |
| Values | Daily Returns |
GP Investments vs. Sumitomo Mitsui Financial
Performance |
| Timeline |
| GP Investments |
| Sumitomo Mitsui Financial |
GP Investments and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and Sumitomo Mitsui
The main advantage of trading using opposite GP Investments and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP 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.| GP Investments vs. Ross Stores | GP Investments vs. Paycom Software | GP Investments vs. MAHLE Metal Leve | GP Investments vs. Bio Techne |
| Sumitomo Mitsui vs. Palantir Technologies | Sumitomo Mitsui vs. Spotify Technology SA | Sumitomo Mitsui vs. Livetech da Bahia | Sumitomo Mitsui vs. Verizon Communications |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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