Correlation Between Sumitomo Chemical and Grupo Carso
Can any of the company-specific risk be diversified away by investing in both Sumitomo Chemical and Grupo Carso 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 Chemical and Grupo Carso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Chemical and Grupo Carso SAB, you can compare the effects of market volatilities on Sumitomo Chemical and Grupo Carso 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 Chemical with a short position of Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Chemical and Grupo Carso.
Diversification Opportunities for Sumitomo Chemical and Grupo Carso
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and Grupo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Chemical and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB and Sumitomo Chemical 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 Chemical are associated (or correlated) with Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Sumitomo Chemical i.e., Sumitomo Chemical and Grupo Carso go up and down completely randomly.
Pair Corralation between Sumitomo Chemical and Grupo Carso
Assuming the 90 days horizon Sumitomo Chemical is expected to under-perform the Grupo Carso. But the stock apears to be less risky and, when comparing its historical volatility, Sumitomo Chemical is 1.07 times less risky than Grupo Carso. The stock trades about -0.02 of its potential returns per unit of risk. The Grupo Carso SAB is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Grupo Carso SAB on January 15, 2025 and sell it today you would earn a total of 156.00 from holding Grupo Carso SAB or generate 39.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
Sumitomo Chemical vs. Grupo Carso SAB
Performance |
| Timeline |
| Sumitomo Chemical |
| Grupo Carso SAB |
Sumitomo Chemical and Grupo Carso Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Chemical and Grupo Carso
The main advantage of trading using opposite Sumitomo Chemical and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Chemical position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.| Sumitomo Chemical vs. Cairo Communication SpA | Sumitomo Chemical vs. Japan Post Insurance | Sumitomo Chemical vs. Ribbon Communications | Sumitomo Chemical vs. SmarTone Telecommunications Holdings |
| Grupo Carso vs. National Beverage Corp | Grupo Carso vs. THAI BEVERAGE | Grupo Carso vs. Nok Airlines PCL | Grupo Carso vs. CENTURIA OFFICE REIT |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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