Correlation Between Sumitomo Mitsui and Asante Gold
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Asante Gold 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 Asante Gold 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 Asante Gold, you can compare the effects of market volatilities on Sumitomo Mitsui and Asante Gold 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 Asante Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Asante Gold.
Diversification Opportunities for Sumitomo Mitsui and Asante Gold
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Asante is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Asante Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asante Gold 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 Asante Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asante Gold has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Asante Gold go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Asante Gold
Given the investment horizon of 90 days Sumitomo Mitsui Financial is expected to generate 0.62 times more return on investment than Asante Gold. However, Sumitomo Mitsui Financial is 1.61 times less risky than Asante Gold. It trades about 0.32 of its potential returns per unit of risk. Asante Gold is currently generating about -0.19 per unit of risk. If you would invest 1,248 in Sumitomo Mitsui Financial on August 29, 2024 and sell it today you would earn a total of 161.00 from holding Sumitomo Mitsui Financial or generate 12.9% 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. Asante Gold
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Asante Gold |
Sumitomo Mitsui and Asante Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Asante Gold
The main advantage of trading using opposite Sumitomo Mitsui and Asante Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Asante Gold 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 Asante Gold will offset losses from the drop in Asante Gold's 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 |
| Asante Gold vs. Ascendant Resources | Asante Gold vs. Cantex Mine Development | Asante Gold vs. Amarc Resources | Asante Gold vs. Sterling Metals Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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