Correlation Between Sumitomo Mitsui and American CuMo
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and American CuMo 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 American CuMo 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 American CuMo Mining, you can compare the effects of market volatilities on Sumitomo Mitsui and American CuMo 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 American CuMo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and American CuMo.
Diversification Opportunities for Sumitomo Mitsui and American CuMo
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and American is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and American CuMo Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American CuMo Mining 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 American CuMo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American CuMo Mining has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and American CuMo go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and American CuMo
Given the investment horizon of 90 days Sumitomo Mitsui is expected to generate 16.45 times less return on investment than American CuMo. But when comparing it to its historical volatility, Sumitomo Mitsui Financial is 15.05 times less risky than American CuMo. It trades about 0.08 of its potential returns per unit of risk. American CuMo Mining is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5.00 in American CuMo Mining on August 29, 2024 and sell it today you would lose (4.00) from holding American CuMo Mining or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.31% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. American CuMo Mining
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| American CuMo Mining |
Sumitomo Mitsui and American CuMo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and American CuMo
The main advantage of trading using opposite Sumitomo Mitsui and American CuMo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, American CuMo 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 American CuMo will offset losses from the drop in American CuMo'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 |
| American CuMo vs. Pasinex Resources Limited | American CuMo vs. Themac Resources Group | American CuMo vs. East Africa Metals | American CuMo vs. Forsys 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |