Correlation Between Japan Post and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both Japan Post 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 Japan Post and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Post Holdings and Sumitomo Mitsui Financial, you can compare the effects of market volatilities on Japan Post 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 Japan Post with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Post and Sumitomo Mitsui.
Diversification Opportunities for Japan Post and Sumitomo Mitsui
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Japan and Sumitomo is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Japan Post Holdings 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 Japan Post 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 Japan Post Holdings 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 Japan Post i.e., Japan Post and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between Japan Post and Sumitomo Mitsui
If you would invest 2,165 in Sumitomo Mitsui Financial on August 24, 2024 and sell it today you would earn a total of 188.00 from holding Sumitomo Mitsui Financial or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Japan Post Holdings vs. Sumitomo Mitsui Financial
Performance |
| Timeline |
| Japan Post Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sumitomo Mitsui Financial |
Japan Post and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Post and Sumitomo Mitsui
The main advantage of trading using opposite Japan Post and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Post 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.| Japan Post vs. Huntington Bancshares Incorporated | Japan Post vs. Fifth Third Bancorp | Japan Post vs. MT Bank | Japan Post vs. Citizens Financial Group, |
| Sumitomo Mitsui vs. Svenska Handelsbanken PK | Sumitomo Mitsui vs. ANZ Group Holdings | Sumitomo Mitsui vs. Westpac Banking | Sumitomo Mitsui vs. National Australia Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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