Correlation Between MAHLE Metal and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal 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 MAHLE Metal and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and Sumitomo Mitsui Financial, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Sumitomo Mitsui.
Diversification Opportunities for MAHLE Metal and Sumitomo Mitsui
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAHLE and Sumitomo is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve 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 MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between MAHLE Metal and Sumitomo Mitsui
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 0.82 times more return on investment than Sumitomo Mitsui. However, MAHLE Metal Leve is 1.23 times less risky than Sumitomo Mitsui. It trades about 0.2 of its potential returns per unit of risk. Sumitomo Mitsui Financial is currently generating about -0.02 per unit of risk. If you would invest 2,651 in MAHLE Metal Leve on November 3, 2024 and sell it today you would earn a total of 184.00 from holding MAHLE Metal Leve or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Sumitomo Mitsui Financial
Performance |
| Timeline |
| MAHLE Metal Leve |
| Sumitomo Mitsui Financial |
MAHLE Metal and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Sumitomo Mitsui
The main advantage of trading using opposite MAHLE Metal and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| Sumitomo Mitsui vs. Ameriprise Financial | Sumitomo Mitsui vs. Mitsubishi UFJ Financial | Sumitomo Mitsui vs. Fresenius Medical Care | Sumitomo Mitsui vs. Lloyds Banking Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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