Correlation Between Sumitomo Mitsui and JSL SA
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and JSL SA 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 JSL SA 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 JSL SA, you can compare the effects of market volatilities on Sumitomo Mitsui and JSL SA 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 JSL SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and JSL SA.
Diversification Opportunities for Sumitomo Mitsui and JSL SA
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sumitomo and JSL is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and JSL SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSL SA 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 JSL SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSL SA has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and JSL SA go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and JSL SA
Assuming the 90 days trading horizon Sumitomo Mitsui Financial is expected to under-perform the JSL SA. But the stock apears to be less risky and, when comparing its historical volatility, Sumitomo Mitsui Financial is 2.45 times less risky than JSL SA. The stock trades about 0.0 of its potential returns per unit of risk. The JSL SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 549.00 in JSL SA on October 25, 2024 and sell it today you would lose (2.00) from holding JSL SA or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. JSL SA
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| JSL SA |
Sumitomo Mitsui and JSL SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and JSL SA
The main advantage of trading using opposite Sumitomo Mitsui and JSL SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, JSL SA 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 JSL SA will offset losses from the drop in JSL SA's long position.| Sumitomo Mitsui vs. Credit Acceptance | Sumitomo Mitsui vs. HDFC Bank Limited | Sumitomo Mitsui vs. Hormel Foods | Sumitomo Mitsui vs. The Hartford Financial |
| JSL SA vs. Zoom Video Communications | JSL SA vs. Charter Communications | JSL SA vs. Sumitomo Mitsui Financial | JSL SA vs. Citizens Financial Group, |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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