Correlation Between Ouro Fino and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both Ouro Fino 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 Ouro Fino and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ouro Fino Sade and Sumitomo Mitsui Financial, you can compare the effects of market volatilities on Ouro Fino 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 Ouro Fino with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ouro Fino and Sumitomo Mitsui.
Diversification Opportunities for Ouro Fino and Sumitomo Mitsui
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ouro and Sumitomo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ouro Fino Sade 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 Ouro Fino 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 Ouro Fino Sade 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 Ouro Fino i.e., Ouro Fino and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between Ouro Fino and Sumitomo Mitsui
Assuming the 90 days trading horizon Ouro Fino is expected to generate 4.63 times less return on investment than Sumitomo Mitsui. But when comparing it to its historical volatility, Ouro Fino Sade is 1.31 times less risky than Sumitomo Mitsui. It trades about 0.03 of its potential returns per unit of risk. Sumitomo Mitsui Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6,784 in Sumitomo Mitsui Financial on September 3, 2024 and sell it today you would earn a total of 1,628 from holding Sumitomo Mitsui Financial or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.64% |
| Values | Daily Returns |
Ouro Fino Sade vs. Sumitomo Mitsui Financial
Performance |
| Timeline |
| Ouro Fino Sade |
| Sumitomo Mitsui Financial |
Ouro Fino and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ouro Fino and Sumitomo Mitsui
The main advantage of trading using opposite Ouro Fino and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ouro Fino 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.| Ouro Fino vs. Sumitomo Mitsui Financial | Ouro Fino vs. Iron Mountain Incorporated | Ouro Fino vs. Capital One Financial | Ouro Fino vs. Mitsubishi UFJ Financial |
| Sumitomo Mitsui vs. Fundo Investimento Imobiliario | Sumitomo Mitsui vs. Fras le SA | Sumitomo Mitsui vs. Western Digital | Sumitomo Mitsui vs. Clave Indices De |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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