Correlation Between Sumitomo Mitsui and Surge Battery
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Surge Battery 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 Surge Battery 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 Surge Battery Metals, you can compare the effects of market volatilities on Sumitomo Mitsui and Surge Battery 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 Surge Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Surge Battery.
Diversification Opportunities for Sumitomo Mitsui and Surge Battery
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Surge is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Surge Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Battery Metals 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 Surge Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Battery Metals has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Surge Battery go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Surge Battery
Assuming the 90 days horizon Sumitomo Mitsui Financial is expected to generate 7.21 times more return on investment than Surge Battery. However, Sumitomo Mitsui is 7.21 times more volatile than Surge Battery Metals. It trades about 0.11 of its potential returns per unit of risk. Surge Battery Metals is currently generating about 0.03 per unit of risk. If you would invest 1,077 in Sumitomo Mitsui Financial on October 25, 2024 and sell it today you would earn a total of 1,368 from holding Sumitomo Mitsui Financial or generate 127.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.57% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Surge Battery Metals
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Surge Battery Metals |
Sumitomo Mitsui and Surge Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Surge Battery
The main advantage of trading using opposite Sumitomo Mitsui and Surge Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Surge Battery 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 Surge Battery will offset losses from the drop in Surge Battery'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 |
| Surge Battery vs. Nevada Sunrise Gold | Surge Battery vs. Critical Elements | Surge Battery vs. Lithium Ionic Corp | Surge Battery vs. Green Technology Metals |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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