Correlation Between Sumitomo Mitsui and Silver Dollar
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Silver Dollar 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 Dollar 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 Dollar Resources, you can compare the effects of market volatilities on Sumitomo Mitsui and Silver Dollar 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 Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Silver Dollar.
Diversification Opportunities for Sumitomo Mitsui and Silver Dollar
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sumitomo and Silver is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and Silver Dollar Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Dollar 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 Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Dollar Resources has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Silver Dollar go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Silver Dollar
Assuming the 90 days horizon Sumitomo Mitsui Financial is expected to generate 0.93 times more return on investment than Silver Dollar. However, Sumitomo Mitsui Financial is 1.08 times less risky than Silver Dollar. It trades about 0.03 of its potential returns per unit of risk. Silver Dollar Resources is currently generating about -0.1 per unit of risk. If you would invest 2,416 in Sumitomo Mitsui Financial on October 26, 2024 and sell it today you would earn a total of 29.00 from holding Sumitomo Mitsui Financial or generate 1.2% 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 Dollar Resources
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| Silver Dollar Resources |
Sumitomo Mitsui and Silver Dollar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Silver Dollar
The main advantage of trading using opposite Sumitomo Mitsui and Silver Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Silver Dollar 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 Dollar will offset losses from the drop in Silver Dollar'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 Dollar vs. Hannan Metals | Silver Dollar vs. Atco Mining | Silver Dollar vs. Leading Edge Materials | Silver Dollar vs. Arianne Phosphate |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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