Correlation Between Sumitomo Mitsui and Silver X
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Silver X 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 X 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 X Mining, you can compare the effects of market volatilities on Sumitomo Mitsui and Silver X 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 X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Silver X.
Diversification Opportunities for Sumitomo Mitsui and Silver X
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Silver is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Silver X Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver X 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 Silver X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver X Mining has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Silver X go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Silver X
Assuming the 90 days horizon Sumitomo Mitsui Financial is expected to generate 0.79 times more return on investment than Silver X. However, Sumitomo Mitsui Financial is 1.27 times less risky than Silver X. It trades about 0.06 of its potential returns per unit of risk. Silver X Mining is currently generating about 0.01 per unit of risk. If you would invest 1,499 in Sumitomo Mitsui Financial on November 9, 2024 and sell it today you would earn a total of 871.00 from holding Sumitomo Mitsui Financial or generate 58.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.5% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Silver X Mining
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Silver X Mining |
Sumitomo Mitsui and Silver X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Silver X
The main advantage of trading using opposite Sumitomo Mitsui and Silver X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Silver X 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 X will offset losses from the drop in Silver X's long position.| Sumitomo Mitsui vs. Barclays PLC ADR | Sumitomo Mitsui vs. HSBC Holdings PLC | Sumitomo Mitsui vs. ING Group NV | Sumitomo Mitsui vs. Citigroup |
| Silver X vs. Aurelia Metals Limited | Silver X vs. Artemis Resources | Silver X vs. Azimut Exploration | Silver X vs. Champion Bear Resources |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |