Correlation Between GameStop Corp and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both GameStop Corp 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 GameStop Corp and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GameStop Corp and Sumitomo Mitsui Construction, you can compare the effects of market volatilities on GameStop Corp 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 GameStop Corp with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of GameStop Corp and Sumitomo Mitsui.
Diversification Opportunities for GameStop Corp and Sumitomo Mitsui
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GameStop and Sumitomo is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding GameStop Corp 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 GameStop Corp 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 GameStop Corp 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 GameStop Corp i.e., GameStop Corp and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between GameStop Corp and Sumitomo Mitsui
Assuming the 90 days trading horizon GameStop Corp is expected to generate 5.74 times more return on investment than Sumitomo Mitsui. However, GameStop Corp is 5.74 times more volatile than Sumitomo Mitsui Construction. It trades about 0.07 of its potential returns per unit of risk. Sumitomo Mitsui Construction is currently generating about 0.01 per unit of risk. If you would invest 1,528 in GameStop Corp on October 16, 2024 and sell it today you would earn a total of 1,607 from holding GameStop Corp or generate 105.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GameStop Corp vs. Sumitomo Mitsui Construction
Performance |
| Timeline |
| GameStop Corp |
| Sumitomo Mitsui Cons |
GameStop Corp and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GameStop Corp and Sumitomo Mitsui
The main advantage of trading using opposite GameStop Corp and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GameStop Corp 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.| GameStop Corp vs. Scottish Mortgage Investment | GameStop Corp vs. DXC Technology Co | GameStop Corp vs. X FAB Silicon Foundries | GameStop Corp vs. American Eagle Outfitters |
| Sumitomo Mitsui vs. EEDUCATION ALBERT AB | Sumitomo Mitsui vs. STRAYER EDUCATION | Sumitomo Mitsui vs. CAREER EDUCATION | Sumitomo Mitsui vs. SLR Investment Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |