Correlation Between Sumitomo Metal and Progressive Planet
Can any of the company-specific risk be diversified away by investing in both Sumitomo Metal and Progressive Planet 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 Metal and Progressive Planet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Metal Mining and Progressive Planet Solutions, you can compare the effects of market volatilities on Sumitomo Metal and Progressive Planet 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 Metal with a short position of Progressive Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Metal and Progressive Planet.
Diversification Opportunities for Sumitomo Metal and Progressive Planet
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sumitomo and Progressive is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Metal Mining and Progressive Planet Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Planet and Sumitomo Metal 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 Metal Mining are associated (or correlated) with Progressive Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Planet has no effect on the direction of Sumitomo Metal i.e., Sumitomo Metal and Progressive Planet go up and down completely randomly.
Pair Corralation between Sumitomo Metal and Progressive Planet
Assuming the 90 days horizon Sumitomo Metal Mining is expected to under-perform the Progressive Planet. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sumitomo Metal Mining is 2.69 times less risky than Progressive Planet. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Progressive Planet Solutions is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Progressive Planet Solutions on August 30, 2024 and sell it today you would lose (5.00) from holding Progressive Planet Solutions or give up 27.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Metal Mining vs. Progressive Planet Solutions
Performance |
| Timeline |
| Sumitomo Metal Mining |
| Progressive Planet |
Sumitomo Metal and Progressive Planet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Metal and Progressive Planet
The main advantage of trading using opposite Sumitomo Metal and Progressive Planet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Metal position performs unexpectedly, Progressive Planet 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 Progressive Planet will offset losses from the drop in Progressive Planet's long position.| Sumitomo Metal vs. Rockridge Resources | Sumitomo Metal vs. Ameriwest Lithium | Sumitomo Metal vs. Osisko Metals Incorporated | Sumitomo Metal vs. Volt Lithium Corp |
| Progressive Planet vs. Avarone Metals | Progressive Planet vs. Amarc Resources | Progressive Planet vs. Huntsman Exploration | Progressive Planet vs. Adriatic Metals PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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