Correlation Between Sumitomo Mitsui and Glacier Media
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Glacier Media 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 Glacier Media 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 Glacier Media, you can compare the effects of market volatilities on Sumitomo Mitsui and Glacier Media 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 Glacier Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Glacier Media.
Diversification Opportunities for Sumitomo Mitsui and Glacier Media
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumitomo and Glacier is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Glacier Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glacier Media 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 Glacier Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glacier Media has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Glacier Media go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Glacier Media
Assuming the 90 days horizon Sumitomo Mitsui Financial is expected to generate 11.67 times more return on investment than Glacier Media. However, Sumitomo Mitsui is 11.67 times more volatile than Glacier Media. It trades about 0.13 of its potential returns per unit of risk. Glacier Media is currently generating about 0.0 per unit of risk. If you would invest 832.00 in Sumitomo Mitsui Financial on August 28, 2024 and sell it today you would earn a total of 1,584 from holding Sumitomo Mitsui Financial or generate 190.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Glacier Media
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Glacier Media |
Sumitomo Mitsui and Glacier Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Glacier Media
The main advantage of trading using opposite Sumitomo Mitsui and Glacier Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Glacier Media 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 Glacier Media will offset losses from the drop in Glacier Media's long position.| Sumitomo Mitsui vs. ANZ Group Holdings | Sumitomo Mitsui vs. Agricultural Bank | Sumitomo Mitsui vs. Industrial and Commercial | Sumitomo Mitsui vs. Bank of America |
| Glacier Media vs. HUMANA INC | Glacier Media vs. SCOR PK | Glacier Media vs. Aquagold International | Glacier Media vs. Barloworld Ltd ADR |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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