Correlation Between Sumitomo Electric and Marti Technologies
Can any of the company-specific risk be diversified away by investing in both Sumitomo Electric and Marti Technologies 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 Electric and Marti Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Electric Industries and Marti Technologies, you can compare the effects of market volatilities on Sumitomo Electric and Marti Technologies 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 Electric with a short position of Marti Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Electric and Marti Technologies.
Diversification Opportunities for Sumitomo Electric and Marti Technologies
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sumitomo and Marti is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Electric Industries and Marti Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marti Technologies and Sumitomo Electric 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 Electric Industries are associated (or correlated) with Marti Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marti Technologies has no effect on the direction of Sumitomo Electric i.e., Sumitomo Electric and Marti Technologies go up and down completely randomly.
Pair Corralation between Sumitomo Electric and Marti Technologies
Assuming the 90 days horizon Sumitomo Electric is expected to generate 9.25 times less return on investment than Marti Technologies. But when comparing it to its historical volatility, Sumitomo Electric Industries is 10.92 times less risky than Marti Technologies. It trades about 0.13 of its potential returns per unit of risk. Marti Technologies is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 174.00 in Marti Technologies on September 1, 2024 and sell it today you would earn a total of 168.00 from holding Marti Technologies or generate 96.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Sumitomo Electric Industries vs. Marti Technologies
Performance |
| Timeline |
| Sumitomo Electric |
| Marti Technologies |
Sumitomo Electric and Marti Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Electric and Marti Technologies
The main advantage of trading using opposite Sumitomo Electric and Marti Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Electric position performs unexpectedly, Marti Technologies 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 Marti Technologies will offset losses from the drop in Marti Technologies' long position.| Sumitomo Electric vs. Micron Technology | Sumitomo Electric vs. Elmos Semiconductor SE | Sumitomo Electric vs. ASE Industrial Holding | Sumitomo Electric vs. Perseus Mining Limited |
| Marti Technologies vs. Fevertree Drinks Plc | Marti Technologies vs. Suntory Beverage Food | Marti Technologies vs. Datadog | Marti Technologies vs. National Beverage Corp |
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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