Correlation Between Sumitomo Corp and Toshiba Corp
Can any of the company-specific risk be diversified away by investing in both Sumitomo Corp and Toshiba Corp 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 Toshiba Corp 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 Toshiba Corp PK, you can compare the effects of market volatilities on Sumitomo Corp and Toshiba Corp 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 Toshiba Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Corp and Toshiba Corp.
Diversification Opportunities for Sumitomo Corp and Toshiba Corp
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sumitomo and Toshiba is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Corp ADR and Toshiba Corp PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toshiba Corp PK 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 Toshiba Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toshiba Corp PK has no effect on the direction of Sumitomo Corp i.e., Sumitomo Corp and Toshiba Corp go up and down completely randomly.
Pair Corralation between Sumitomo Corp and Toshiba Corp
If you would invest 1,607 in Toshiba Corp PK on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Toshiba Corp PK or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.53% |
| Values | Daily Returns |
Sumitomo Corp ADR vs. Toshiba Corp PK
Performance |
| Timeline |
| Sumitomo Corp ADR |
| Toshiba Corp PK |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sumitomo Corp and Toshiba Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Corp and Toshiba Corp
The main advantage of trading using opposite Sumitomo Corp and Toshiba Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Corp position performs unexpectedly, Toshiba Corp 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 Toshiba Corp will offset losses from the drop in Toshiba Corp's long position.| Sumitomo Corp vs. Itochu Corp ADR | Sumitomo Corp vs. Mitsubishi Corp | Sumitomo Corp vs. ITOCHU | Sumitomo Corp vs. Marubeni Corp ADR |
| Toshiba Corp vs. Sumitomo Corp ADR | Toshiba Corp vs. Hitachi | Toshiba Corp vs. Swire Pacific | Toshiba Corp vs. Seaboard |
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 Stocks Directory module to find actively traded stocks across global markets.
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