Correlation Between Mitsubishi and Sumitomo
Can any of the company-specific risk be diversified away by investing in both Mitsubishi and Sumitomo 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 Mitsubishi and Sumitomo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mitsubishi and Sumitomo, you can compare the effects of market volatilities on Mitsubishi and Sumitomo 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 Mitsubishi with a short position of Sumitomo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mitsubishi and Sumitomo.
Diversification Opportunities for Mitsubishi and Sumitomo
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mitsubishi and Sumitomo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mitsubishi and Sumitomo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo and Mitsubishi 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 Mitsubishi are associated (or correlated) with Sumitomo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo has no effect on the direction of Mitsubishi i.e., Mitsubishi and Sumitomo go up and down completely randomly.
Pair Corralation between Mitsubishi and Sumitomo
If you would invest 1,520 in Sumitomo on August 25, 2024 and sell it today you would earn a total of 472.00 from holding Sumitomo or generate 31.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mitsubishi vs. Sumitomo
Performance |
| Timeline |
| Mitsubishi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sumitomo |
Mitsubishi and Sumitomo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mitsubishi and Sumitomo
The main advantage of trading using opposite Mitsubishi and Sumitomo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitsubishi position performs unexpectedly, Sumitomo 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 will offset losses from the drop in Sumitomo's long position.| Mitsubishi vs. SCANSOURCE | Mitsubishi vs. Eagle Materials | Mitsubishi vs. SLR Investment Corp | Mitsubishi vs. ECHO INVESTMENT ZY |
| Sumitomo vs. UNITED RENTALS | Sumitomo vs. Adtalem Global Education | Sumitomo vs. EEDUCATION ALBERT AB | Sumitomo vs. Perdoceo Education |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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