Correlation Between Sumitomo Mitsui and CD Projekt
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and CD Projekt 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 CD Projekt 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 CD Projekt SA, you can compare the effects of market volatilities on Sumitomo Mitsui and CD Projekt 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 CD Projekt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and CD Projekt.
Diversification Opportunities for Sumitomo Mitsui and CD Projekt
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and OTGLF is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and CD Projekt SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CD Projekt SA 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 CD Projekt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CD Projekt SA has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and CD Projekt go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and CD Projekt
Given the investment horizon of 90 days Sumitomo Mitsui Financial is expected to generate 0.86 times more return on investment than CD Projekt. However, Sumitomo Mitsui Financial is 1.17 times less risky than CD Projekt. It trades about 0.05 of its potential returns per unit of risk. CD Projekt SA is currently generating about 0.03 per unit of risk. If you would invest 1,282 in Sumitomo Mitsui Financial on August 28, 2024 and sell it today you would earn a total of 166.00 from holding Sumitomo Mitsui Financial or generate 12.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. CD Projekt SA
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| CD Projekt SA |
Sumitomo Mitsui and CD Projekt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and CD Projekt
The main advantage of trading using opposite Sumitomo Mitsui and CD Projekt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, CD Projekt 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 CD Projekt will offset losses from the drop in CD Projekt'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 |
| CD Projekt vs. Square Enix Holdings | CD Projekt vs. Sega Sammy Holdings | CD Projekt vs. Capcom Co Ltd | CD Projekt vs. Embracer Group AB |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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