Correlation Between Sumitomo Mitsui and Aurion Resources
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Aurion Resources 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 Aurion Resources 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 Aurion Resources, you can compare the effects of market volatilities on Sumitomo Mitsui and Aurion Resources 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 Aurion Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Aurion Resources.
Diversification Opportunities for Sumitomo Mitsui and Aurion Resources
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and Aurion is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Aurion Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurion Resources 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 Aurion Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurion Resources has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Aurion Resources go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Aurion Resources
Given the investment horizon of 90 days Sumitomo Mitsui Financial is expected to generate 0.44 times more return on investment than Aurion Resources. However, Sumitomo Mitsui Financial is 2.29 times less risky than Aurion Resources. It trades about 0.42 of its potential returns per unit of risk. Aurion Resources is currently generating about -0.21 per unit of risk. If you would invest 1,248 in Sumitomo Mitsui Financial on August 28, 2024 and sell it today you would earn a total of 200.00 from holding Sumitomo Mitsui Financial or generate 16.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Aurion Resources
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Aurion Resources |
Sumitomo Mitsui and Aurion Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Aurion Resources
The main advantage of trading using opposite Sumitomo Mitsui and Aurion Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Aurion Resources 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 Aurion Resources will offset losses from the drop in Aurion Resources' long position.| Sumitomo Mitsui vs. Barclays PLC ADR | Sumitomo Mitsui vs. Mitsubishi UFJ Financial | Sumitomo Mitsui vs. ING Group NV | Sumitomo Mitsui vs. HSBC Holdings PLC |
| Aurion Resources vs. Minnova Corp | Aurion Resources vs. Argo Gold | Aurion Resources vs. Advance Gold Corp | Aurion Resources vs. Blue Star Gold |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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