Correlation Between Sumitomo Mitsui and DENTSPLY SIRONA
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and DENTSPLY SIRONA 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 DENTSPLY SIRONA 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 DENTSPLY SIRONA, you can compare the effects of market volatilities on Sumitomo Mitsui and DENTSPLY SIRONA 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 DENTSPLY SIRONA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and DENTSPLY SIRONA.
Diversification Opportunities for Sumitomo Mitsui and DENTSPLY SIRONA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and DENTSPLY is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and DENTSPLY SIRONA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DENTSPLY SIRONA 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 DENTSPLY SIRONA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DENTSPLY SIRONA has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and DENTSPLY SIRONA go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and DENTSPLY SIRONA
Assuming the 90 days trading horizon Sumitomo Mitsui Financial is expected to generate 19.29 times more return on investment than DENTSPLY SIRONA. However, Sumitomo Mitsui is 19.29 times more volatile than DENTSPLY SIRONA. It trades about 0.16 of its potential returns per unit of risk. DENTSPLY SIRONA is currently generating about 0.01 per unit of risk. If you would invest 8,080 in Sumitomo Mitsui Financial on October 11, 2024 and sell it today you would earn a total of 984.00 from holding Sumitomo Mitsui Financial or generate 12.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. DENTSPLY SIRONA
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| DENTSPLY SIRONA |
Sumitomo Mitsui and DENTSPLY SIRONA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and DENTSPLY SIRONA
The main advantage of trading using opposite Sumitomo Mitsui and DENTSPLY SIRONA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, DENTSPLY SIRONA 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 DENTSPLY SIRONA will offset losses from the drop in DENTSPLY SIRONA's long position.| Sumitomo Mitsui vs. Waste Management | Sumitomo Mitsui vs. METISA Metalrgica Timboense | Sumitomo Mitsui vs. Eastman Chemical | Sumitomo Mitsui vs. Charter Communications |
| DENTSPLY SIRONA vs. Jefferies Financial Group | DENTSPLY SIRONA vs. Brpr Corporate Offices | DENTSPLY SIRONA vs. Sumitomo Mitsui Financial | DENTSPLY SIRONA vs. Electronic Arts |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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