Correlation Between Sumitomo Mitsui and Banco Pine
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Banco Pine 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 Banco Pine 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 Banco Pine SA, you can compare the effects of market volatilities on Sumitomo Mitsui and Banco Pine 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 Banco Pine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Banco Pine.
Diversification Opportunities for Sumitomo Mitsui and Banco Pine
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and Banco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Banco Pine SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Pine 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 Banco Pine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Pine SA has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Banco Pine go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Banco Pine
Assuming the 90 days trading horizon Sumitomo Mitsui Financial is expected to under-perform the Banco Pine. But the stock apears to be less risky and, when comparing its historical volatility, Sumitomo Mitsui Financial is 1.72 times less risky than Banco Pine. The stock trades about 0.0 of its potential returns per unit of risk. The Banco Pine SA is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 399.00 in Banco Pine SA on October 26, 2024 and sell it today you would earn a total of 41.00 from holding Banco Pine SA or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Banco Pine SA
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Banco Pine SA |
Sumitomo Mitsui and Banco Pine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Banco Pine
The main advantage of trading using opposite Sumitomo Mitsui and Banco Pine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Banco Pine 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 Banco Pine will offset losses from the drop in Banco Pine's long position.| Sumitomo Mitsui vs. METISA Metalrgica Timboense | Sumitomo Mitsui vs. Telecomunicaes Brasileiras SA | Sumitomo Mitsui vs. Nordon Indstrias Metalrgicas | Sumitomo Mitsui vs. Zoom Video Communications |
| Banco Pine vs. JB Hunt Transport | Banco Pine vs. Patria Investments Limited | Banco Pine vs. Unity Software | Banco Pine vs. United Rentals |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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