Correlation Between Sumitomo Mitsui and Fundo Investimento
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Fundo Investimento 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 Fundo Investimento 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 Fundo Investimento Imobiliario, you can compare the effects of market volatilities on Sumitomo Mitsui and Fundo Investimento 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 Fundo Investimento. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Fundo Investimento.
Diversification Opportunities for Sumitomo Mitsui and Fundo Investimento
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Fundo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Fundo Investimento Imobiliario in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fundo Investimento 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 Fundo Investimento. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fundo Investimento has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Fundo Investimento go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Fundo Investimento
Assuming the 90 days trading horizon Sumitomo Mitsui Financial is expected to generate 4.33 times more return on investment than Fundo Investimento. However, Sumitomo Mitsui is 4.33 times more volatile than Fundo Investimento Imobiliario. It trades about 0.44 of its potential returns per unit of risk. Fundo Investimento Imobiliario is currently generating about -0.05 per unit of risk. If you would invest 7,432 in Sumitomo Mitsui Financial on September 5, 2024 and sell it today you would earn a total of 1,928 from holding Sumitomo Mitsui Financial or generate 25.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Fundo Investimento Imobiliario
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Fundo Investimento |
Sumitomo Mitsui and Fundo Investimento Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Fundo Investimento
The main advantage of trading using opposite Sumitomo Mitsui and Fundo Investimento positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Fundo Investimento 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 Fundo Investimento will offset losses from the drop in Fundo Investimento's long position.| Sumitomo Mitsui vs. Fundo Investimento Imobiliario | Sumitomo Mitsui vs. Fras le SA | Sumitomo Mitsui vs. Western Digital | Sumitomo Mitsui vs. Clave Indices De |
| Fundo Investimento vs. BTG Pactual Logstica | Fundo Investimento vs. KILIMA VOLKANO RECEBVEIS | Fundo Investimento vs. DEVANT PROPERTIES FUNDO | Fundo Investimento vs. SPARTA FIAGRO FDO |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |