Correlation Between Sumitomo Corp and Sojitz
Can any of the company-specific risk be diversified away by investing in both Sumitomo Corp and Sojitz 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 Corp and Sojitz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Corp ADR and Sojitz, you can compare the effects of market volatilities on Sumitomo Corp and Sojitz 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 Corp with a short position of Sojitz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Corp and Sojitz.
Diversification Opportunities for Sumitomo Corp and Sojitz
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sumitomo and Sojitz is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Corp ADR and Sojitz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sojitz and Sumitomo Corp 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 Corp ADR are associated (or correlated) with Sojitz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sojitz has no effect on the direction of Sumitomo Corp i.e., Sumitomo Corp and Sojitz go up and down completely randomly.
Pair Corralation between Sumitomo Corp and Sojitz
If you would invest 2,114 in Sumitomo Corp ADR on September 2, 2024 and sell it today you would earn a total of 23.00 from holding Sumitomo Corp ADR or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Sumitomo Corp ADR vs. Sojitz
Performance |
| Timeline |
| Sumitomo Corp ADR |
| Sojitz |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sumitomo Corp and Sojitz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Corp and Sojitz
The main advantage of trading using opposite Sumitomo Corp and Sojitz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Corp position performs unexpectedly, Sojitz 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 Sojitz will offset losses from the drop in Sojitz's long position.| Sumitomo Corp vs. Itochu Corp ADR | Sumitomo Corp vs. Mitsubishi Corp | Sumitomo Corp vs. ITOCHU | Sumitomo Corp vs. Marubeni Corp ADR |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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