Correlation Between Sumitomo Electric and OppFi
Can any of the company-specific risk be diversified away by investing in both Sumitomo Electric and OppFi 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 OppFi 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 OppFi Inc, you can compare the effects of market volatilities on Sumitomo Electric and OppFi 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 OppFi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Electric and OppFi.
Diversification Opportunities for Sumitomo Electric and OppFi
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sumitomo and OppFi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Electric Industries and OppFi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OppFi Inc 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 OppFi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OppFi Inc has no effect on the direction of Sumitomo Electric i.e., Sumitomo Electric and OppFi go up and down completely randomly.
Pair Corralation between Sumitomo Electric and OppFi
If you would invest 683.00 in OppFi Inc on September 12, 2024 and sell it today you would earn a total of 2.00 from holding OppFi Inc or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Electric Industries vs. OppFi Inc
Performance |
| Timeline |
| Sumitomo Electric |
| OppFi Inc |
Sumitomo Electric and OppFi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Electric and OppFi
The main advantage of trading using opposite Sumitomo Electric and OppFi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Electric position performs unexpectedly, OppFi 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 OppFi will offset losses from the drop in OppFi's long position.| Sumitomo Electric vs. Air Transport Services | Sumitomo Electric vs. Delta Air Lines | Sumitomo Electric vs. Allegiant Travel | Sumitomo Electric vs. Kite Realty Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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