Correlation Between Sumitomo Mitsui and Allegiant Gold
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Allegiant 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 Allegiant 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 Allegiant Gold, you can compare the effects of market volatilities on Sumitomo Mitsui and Allegiant 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 Allegiant Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Allegiant Gold.
Diversification Opportunities for Sumitomo Mitsui and Allegiant Gold
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Allegiant is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Allegiant Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegiant 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 Allegiant Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegiant Gold has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Allegiant Gold go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Allegiant Gold
Given the investment horizon of 90 days Sumitomo Mitsui Financial is expected to generate 0.27 times more return on investment than Allegiant Gold. However, Sumitomo Mitsui Financial is 3.73 times less risky than Allegiant Gold. It trades about 0.36 of its potential returns per unit of risk. Allegiant Gold is currently generating about -0.2 per unit of risk. If you would invest 1,277 in Sumitomo Mitsui Financial on September 1, 2024 and sell it today you would earn a total of 204.00 from holding Sumitomo Mitsui Financial or generate 15.97% 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. Allegiant Gold
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Allegiant Gold |
Sumitomo Mitsui and Allegiant Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Allegiant Gold
The main advantage of trading using opposite Sumitomo Mitsui and Allegiant Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Allegiant 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 Allegiant Gold will offset losses from the drop in Allegiant 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 |
| Allegiant Gold vs. South32 Limited | Allegiant Gold vs. NioCorp Developments Ltd | Allegiant Gold vs. HUMANA INC | Allegiant Gold vs. SCOR PK |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |