Correlation Between Sumco Corp and Lasertec
Can any of the company-specific risk be diversified away by investing in both Sumco Corp and Lasertec 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 Sumco Corp and Lasertec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumco Corp ADR and Lasertec, you can compare the effects of market volatilities on Sumco Corp and Lasertec 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 Sumco Corp with a short position of Lasertec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumco Corp and Lasertec.
Diversification Opportunities for Sumco Corp and Lasertec
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumco and Lasertec is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sumco Corp ADR and Lasertec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lasertec and Sumco 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 Sumco Corp ADR are associated (or correlated) with Lasertec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lasertec has no effect on the direction of Sumco Corp i.e., Sumco Corp and Lasertec go up and down completely randomly.
Pair Corralation between Sumco Corp and Lasertec
Assuming the 90 days horizon Sumco Corp ADR is expected to under-perform the Lasertec. In addition to that, Sumco Corp is 1.87 times more volatile than Lasertec. It trades about -0.04 of its total potential returns per unit of risk. Lasertec is currently generating about 0.09 per unit of volatility. If you would invest 9,082 in Lasertec on December 30, 2024 and sell it today you would earn a total of 269.00 from holding Lasertec or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumco Corp ADR vs. Lasertec
Performance |
| Timeline |
| Sumco Corp ADR |
| Lasertec |
Sumco Corp and Lasertec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumco Corp and Lasertec
The main advantage of trading using opposite Sumco Corp and Lasertec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumco Corp position performs unexpectedly, Lasertec 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 Lasertec will offset losses from the drop in Lasertec's long position.| Sumco Corp vs. Lasertec | Sumco Corp vs. Asm Pacific Technology | Sumco Corp vs. Disco Corp ADR | Sumco Corp vs. Tokyo Electron |
| Lasertec vs. Sumco Corp ADR | Lasertec vs. Asm Pacific Technology | Lasertec vs. Disco Corp ADR | Lasertec vs. Tokyo Electron |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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