Correlation Between Sumitomo Chemical and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Sumitomo Chemical and Fidelity National 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 Fidelity National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Chemical and Fidelity National Information, you can compare the effects of market volatilities on Sumitomo Chemical and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Chemical and Fidelity National.
Diversification Opportunities for Sumitomo Chemical and Fidelity National
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Fidelity is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Chemical and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Sumitomo Chemical i.e., Sumitomo Chemical and Fidelity National go up and down completely randomly.
Pair Corralation between Sumitomo Chemical and Fidelity National
Assuming the 90 days horizon Sumitomo Chemical is expected to under-perform the Fidelity National. In addition to that, Sumitomo Chemical is 1.4 times more volatile than Fidelity National Information. It trades about -0.02 of its total potential returns per unit of risk. Fidelity National Information is currently generating about 0.03 per unit of volatility. If you would invest 6,521 in Fidelity National Information on August 26, 2024 and sell it today you would earn a total of 1,691 from holding Fidelity National Information or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Chemical vs. Fidelity National Information
Performance |
| Timeline |
| Sumitomo Chemical |
| Fidelity National |
Sumitomo Chemical and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Chemical and Fidelity National
The main advantage of trading using opposite Sumitomo Chemical and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Chemical position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Sumitomo Chemical vs. Superior Plus Corp | Sumitomo Chemical vs. NMI Holdings | Sumitomo Chemical vs. Origin Agritech | Sumitomo Chemical vs. SIVERS SEMICONDUCTORS AB |
| Fidelity National vs. WILLIS LEASE FIN | Fidelity National vs. FAST RETAIL ADR | Fidelity National vs. CARSALESCOM | Fidelity National vs. Jacquet Metal Service |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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