Correlation Between Mill City and Sumitomo Electric
Can any of the company-specific risk be diversified away by investing in both Mill City and Sumitomo Electric 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 Mill City and Sumitomo Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mill City Ventures and Sumitomo Electric Industries, you can compare the effects of market volatilities on Mill City and Sumitomo Electric 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 Mill City with a short position of Sumitomo Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mill City and Sumitomo Electric.
Diversification Opportunities for Mill City and Sumitomo Electric
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mill and Sumitomo is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mill City Ventures and Sumitomo Electric Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Electric and Mill City 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 Mill City Ventures are associated (or correlated) with Sumitomo Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Electric has no effect on the direction of Mill City i.e., Mill City and Sumitomo Electric go up and down completely randomly.
Pair Corralation between Mill City and Sumitomo Electric
Given the investment horizon of 90 days Mill City Ventures is expected to generate 53.52 times more return on investment than Sumitomo Electric. However, Mill City is 53.52 times more volatile than Sumitomo Electric Industries. It trades about 0.06 of its potential returns per unit of risk. Sumitomo Electric Industries is currently generating about 0.09 per unit of risk. If you would invest 213.00 in Mill City Ventures on September 4, 2024 and sell it today you would lose (13.00) from holding Mill City Ventures or give up 6.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.34% |
| Values | Daily Returns |
Mill City Ventures vs. Sumitomo Electric Industries
Performance |
| Timeline |
| Mill City Ventures |
| Sumitomo Electric |
Mill City and Sumitomo Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mill City and Sumitomo Electric
The main advantage of trading using opposite Mill City and Sumitomo Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mill City position performs unexpectedly, Sumitomo Electric 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 Electric will offset losses from the drop in Sumitomo Electric's long position.| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
| Sumitomo Electric vs. OppFi Inc | Sumitomo Electric vs. Fortinet | Sumitomo Electric vs. Brera Holdings PLC | Sumitomo Electric vs. MetLife |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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