Correlation Between Sumitomo Mitsui and Silver One
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Silver One 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 Silver One 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 Silver One Resources, you can compare the effects of market volatilities on Sumitomo Mitsui and Silver One 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 Silver One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Silver One.
Diversification Opportunities for Sumitomo Mitsui and Silver One
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Silver is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Silver One Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver One 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 Silver One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver One Resources has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Silver One go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Silver One
Given the investment horizon of 90 days Sumitomo Mitsui is expected to generate 1.26 times less return on investment than Silver One. But when comparing it to its historical volatility, Sumitomo Mitsui Financial is 3.17 times less risky than Silver One. It trades about 0.08 of its potential returns per unit of risk. Silver One Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Silver One Resources on August 24, 2024 and sell it today you would earn a total of 1.00 from holding Silver One Resources or generate 6.25% 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. Silver One Resources
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Silver One Resources |
Sumitomo Mitsui and Silver One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Silver One
The main advantage of trading using opposite Sumitomo Mitsui and Silver One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Silver One 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 Silver One will offset losses from the drop in Silver One'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 |
| Silver One vs. Ascendant Resources | Silver One vs. Cantex Mine Development | Silver One vs. Amarc Resources | Silver One 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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