Correlation Between Sumco Corp and Transphorm Technology
Can any of the company-specific risk be diversified away by investing in both Sumco Corp and Transphorm Technology 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 Transphorm Technology 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 Transphorm Technology, you can compare the effects of market volatilities on Sumco Corp and Transphorm Technology 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 Transphorm Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumco Corp and Transphorm Technology.
Diversification Opportunities for Sumco Corp and Transphorm Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sumco and Transphorm is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sumco Corp ADR and Transphorm Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transphorm Technology 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 Transphorm Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transphorm Technology has no effect on the direction of Sumco Corp i.e., Sumco Corp and Transphorm Technology go up and down completely randomly.
Pair Corralation between Sumco Corp and Transphorm Technology
Assuming the 90 days horizon Sumco Corp ADR is expected to under-perform the Transphorm Technology. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sumco Corp ADR is 1.35 times less risky than Transphorm Technology. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Transphorm Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 512.00 in Transphorm Technology on September 4, 2024 and sell it today you would lose (2.00) from holding Transphorm Technology or give up 0.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 77.17% |
| Values | Daily Returns |
Sumco Corp ADR vs. Transphorm Technology
Performance |
| Timeline |
| Sumco Corp ADR |
| Transphorm Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sumco Corp and Transphorm Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumco Corp and Transphorm Technology
The main advantage of trading using opposite Sumco Corp and Transphorm Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumco Corp position performs unexpectedly, Transphorm Technology 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 Transphorm Technology will offset losses from the drop in Transphorm Technology's long position.| Sumco Corp vs. Lasertec | Sumco Corp vs. Asm Pacific Technology | Sumco Corp vs. Disco Corp ADR | Sumco Corp vs. Tokyo Electron |
| Transphorm Technology vs. Sumco Corp ADR | Transphorm Technology vs. Lasertec | Transphorm Technology vs. Asm Pacific Technology | Transphorm Technology vs. Disco 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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