Correlation Between Sumitomo Mitsui and Companhia
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Companhia 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 Sumitomo Mitsui and Companhia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Mitsui Financial and Companhia de Fiao, you can compare the effects of market volatilities on Sumitomo Mitsui and Companhia 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 Sumitomo Mitsui with a short position of Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Companhia.
Diversification Opportunities for Sumitomo Mitsui and Companhia
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and Companhia is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Companhia de Fiao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia de Fiao and Sumitomo Mitsui 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 Sumitomo Mitsui Financial are associated (or correlated) with Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia de Fiao has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Companhia go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Companhia
Assuming the 90 days trading horizon Sumitomo Mitsui Financial is expected to generate 1.18 times more return on investment than Companhia. However, Sumitomo Mitsui is 1.18 times more volatile than Companhia de Fiao. It trades about 0.22 of its potential returns per unit of risk. Companhia de Fiao is currently generating about -0.12 per unit of risk. If you would invest 8,080 in Sumitomo Mitsui Financial on September 14, 2024 and sell it today you would earn a total of 956.00 from holding Sumitomo Mitsui Financial or generate 11.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Companhia de Fiao
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Companhia de Fiao |
Sumitomo Mitsui and Companhia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Companhia
The main advantage of trading using opposite Sumitomo Mitsui and Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Companhia 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 Companhia will offset losses from the drop in Companhia's long position.| Sumitomo Mitsui vs. Delta Air Lines | Sumitomo Mitsui vs. Broadcom | Sumitomo Mitsui vs. G2D Investments | Sumitomo Mitsui vs. salesforce inc |
| Companhia vs. Companhia de Fiacao | Companhia vs. Companhia de Tecidos | Companhia vs. Companhia Tecidos Santanense | Companhia vs. Companhia Tecidos Santanense |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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