Correlation Between SVB Financial and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both SVB Financial 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 SVB Financial and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVB Financial Group and Sumitomo Mitsui Financial, you can compare the effects of market volatilities on SVB Financial 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 SVB Financial with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB Financial and Sumitomo Mitsui.
Diversification Opportunities for SVB Financial and Sumitomo Mitsui
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SVB and Sumitomo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB Financial Group 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 SVB Financial 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 SVB Financial Group 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 SVB Financial i.e., SVB Financial and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between SVB Financial and Sumitomo Mitsui
Assuming the 90 days trading horizon SVB Financial Group is expected to under-perform the Sumitomo Mitsui. In addition to that, SVB Financial is 1.13 times more volatile than Sumitomo Mitsui Financial. It trades about -0.04 of its total potential returns per unit of risk. Sumitomo Mitsui Financial is currently generating about 0.1 per unit of volatility. If you would invest 3,553 in Sumitomo Mitsui Financial on August 27, 2024 and sell it today you would earn a total of 4,711 from holding Sumitomo Mitsui Financial or generate 132.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 77.13% |
| Values | Daily Returns |
SVB Financial Group vs. Sumitomo Mitsui Financial
Performance |
| Timeline |
| SVB Financial Group |
| Sumitomo Mitsui Financial |
SVB Financial and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVB Financial and Sumitomo Mitsui
The main advantage of trading using opposite SVB Financial and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB Financial 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.| SVB Financial vs. Fras le SA | SVB Financial vs. Clave Indices De | SVB Financial vs. BTG Pactual Logstica | SVB Financial vs. Telefonaktiebolaget LM Ericsson |
| Sumitomo Mitsui vs. Fras le SA | Sumitomo Mitsui vs. Clave Indices De | Sumitomo Mitsui vs. BTG Pactual Logstica | Sumitomo Mitsui vs. Telefonaktiebolaget LM Ericsson |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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