Correlation Between Aquagold International and Sumitomo Corp
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Sumitomo 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 Aquagold International and Sumitomo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Sumitomo Corp ADR, you can compare the effects of market volatilities on Aquagold International and Sumitomo 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 Aquagold International with a short position of Sumitomo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Sumitomo Corp.
Diversification Opportunities for Aquagold International and Sumitomo Corp
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquagold and Sumitomo is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Sumitomo Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Corp ADR and Aquagold International 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 Aquagold International are associated (or correlated) with Sumitomo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Corp ADR has no effect on the direction of Aquagold International i.e., Aquagold International and Sumitomo Corp go up and down completely randomly.
Pair Corralation between Aquagold International and Sumitomo Corp
Given the investment horizon of 90 days Aquagold International is expected to under-perform the Sumitomo Corp. In addition to that, Aquagold International is 3.34 times more volatile than Sumitomo Corp ADR. It trades about -0.12 of its total potential returns per unit of risk. Sumitomo Corp ADR is currently generating about 0.08 per unit of volatility. If you would invest 2,164 in Sumitomo Corp ADR on December 30, 2024 and sell it today you would earn a total of 191.00 from holding Sumitomo Corp ADR or generate 8.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.38% |
Values | Daily Returns |
Aquagold International vs. Sumitomo Corp ADR
Performance |
Timeline |
Aquagold International |
Sumitomo Corp ADR |
Aquagold International and Sumitomo Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aquagold International and Sumitomo Corp
The main advantage of trading using opposite Aquagold International and Sumitomo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Sumitomo 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 Sumitomo Corp will offset losses from the drop in Sumitomo Corp's long position.Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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