Correlation Between Uwharrie Capital and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both Uwharrie Capital and Sumitomo Mitsui 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 Uwharrie Capital and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uwharrie Capital Corp and Sumitomo Mitsui Trust, you can compare the effects of market volatilities on Uwharrie Capital and Sumitomo Mitsui 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 Uwharrie Capital with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uwharrie Capital and Sumitomo Mitsui.
Diversification Opportunities for Uwharrie Capital and Sumitomo Mitsui
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Uwharrie and Sumitomo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Uwharrie Capital Corp and Sumitomo Mitsui Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Trust and Uwharrie Capital 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 Uwharrie Capital Corp are associated (or correlated) with Sumitomo Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Trust has no effect on the direction of Uwharrie Capital i.e., Uwharrie Capital and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between Uwharrie Capital and Sumitomo Mitsui
Given the investment horizon of 90 days Uwharrie Capital Corp is expected to generate 1.71 times more return on investment than Sumitomo Mitsui. However, Uwharrie Capital is 1.71 times more volatile than Sumitomo Mitsui Trust. It trades about 0.05 of its potential returns per unit of risk. Sumitomo Mitsui Trust is currently generating about 0.04 per unit of risk. If you would invest 670.00 in Uwharrie Capital Corp on January 15, 2025 and sell it today you would earn a total of 185.00 from holding Uwharrie Capital Corp or generate 27.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 41.21% |
| Values | Daily Returns |
Uwharrie Capital Corp vs. Sumitomo Mitsui Trust
Performance |
| Timeline |
| Uwharrie Capital Corp |
| Sumitomo Mitsui Trust |
Uwharrie Capital and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uwharrie Capital and Sumitomo Mitsui
The main advantage of trading using opposite Uwharrie Capital and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uwharrie Capital position performs unexpectedly, Sumitomo Mitsui 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 Sumitomo Mitsui will offset losses from the drop in Sumitomo Mitsui's long position.| Uwharrie Capital vs. ENB Financial Corp | Uwharrie Capital vs. First Reliance Bancshares | Uwharrie Capital vs. Oak Ridge Financial | Uwharrie Capital vs. Glen Burnie Bancorp |
| Sumitomo Mitsui vs. MSAD Insurance Group | Sumitomo Mitsui vs. Svenska Handelsbanken PK | Sumitomo Mitsui vs. Sekisui House Ltd | Sumitomo Mitsui vs. Daiwa House Industry |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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