Correlation Between Sumitomo Mitsui and Piraeus Bank
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and Piraeus Bank 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 Mitsui and Piraeus Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Mitsui Trust and Piraeus Bank SA, you can compare the effects of market volatilities on Sumitomo Mitsui and Piraeus Bank 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 Mitsui with a short position of Piraeus Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and Piraeus Bank.
Diversification Opportunities for Sumitomo Mitsui and Piraeus Bank
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumitomo and Piraeus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Trust and Piraeus Bank SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Piraeus Bank SA and Sumitomo Mitsui 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 Mitsui Trust are associated (or correlated) with Piraeus Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Piraeus Bank SA has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and Piraeus Bank go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and Piraeus Bank
Assuming the 90 days horizon Sumitomo Mitsui is expected to generate 2.63 times less return on investment than Piraeus Bank. But when comparing it to its historical volatility, Sumitomo Mitsui Trust is 2.47 times less risky than Piraeus Bank. It trades about 0.07 of its potential returns per unit of risk. Piraeus Bank SA is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 129.00 in Piraeus Bank SA on September 2, 2024 and sell it today you would earn a total of 243.00 from holding Piraeus Bank SA or generate 188.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Trust vs. Piraeus Bank SA
Performance |
| Timeline |
| Sumitomo Mitsui Trust |
| Piraeus Bank SA |
Sumitomo Mitsui and Piraeus Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and Piraeus Bank
The main advantage of trading using opposite Sumitomo Mitsui and Piraeus Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, Piraeus Bank 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 Piraeus Bank will offset losses from the drop in Piraeus Bank's long position.| Sumitomo Mitsui vs. Piraeus Bank SA | Sumitomo Mitsui vs. Turkiye Garanti Bankasi | Sumitomo Mitsui vs. Uwharrie Capital Corp |
| Piraeus Bank vs. Bankinter SA ADR | Piraeus Bank vs. JAPAN POST BANK | Piraeus Bank vs. JAPAN POST BANK | Piraeus Bank vs. Eurobank Ergasias Services |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |