Correlation Between Sumitomo Mitsui and Shaw Communications
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Shaw Communications 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 Shaw Communications 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 Shaw Communications Class, you can compare the effects of market volatilities on Sumitomo Mitsui and Shaw Communications 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 Shaw Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Shaw Communications.
Diversification Opportunities for Sumitomo Mitsui and Shaw Communications
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sumitomo and Shaw is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Shaw Communications Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shaw Communications Class 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 Shaw Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shaw Communications Class has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Shaw Communications go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Shaw Communications
Assuming the 90 days horizon Sumitomo Mitsui Financial is expected to generate 42.19 times more return on investment than Shaw Communications. However, Sumitomo Mitsui is 42.19 times more volatile than Shaw Communications Class. It trades about 0.13 of its potential returns per unit of risk. Shaw Communications Class is currently generating about 0.13 per unit of risk. If you would invest 851.00 in Sumitomo Mitsui Financial on August 27, 2024 and sell it today you would earn a total of 1,610 from holding Sumitomo Mitsui Financial or generate 189.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 17.08% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. Shaw Communications Class
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Shaw Communications Class |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sumitomo Mitsui and Shaw Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Shaw Communications
The main advantage of trading using opposite Sumitomo Mitsui and Shaw Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Shaw Communications 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 Shaw Communications will offset losses from the drop in Shaw Communications' 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 |
| Shaw Communications vs. Telus Corp | Shaw Communications vs. BCE Inc | Shaw Communications vs. Telefonica Brasil SA | Shaw Communications vs. Orange SA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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