Correlation Between CTPartners Executive and Sumitomo Metal

Can any of the company-specific risk be diversified away by investing in both CTPartners Executive and Sumitomo Metal 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 CTPartners Executive and Sumitomo Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTPartners Executive Search and Sumitomo Metal Mining, you can compare the effects of market volatilities on CTPartners Executive and Sumitomo Metal 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 CTPartners Executive with a short position of Sumitomo Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTPartners Executive and Sumitomo Metal.

Diversification Opportunities for CTPartners Executive and Sumitomo Metal

0.0

Correlation Coefficient

CTPartners Executive  Sumitomo Metal

Pay attention - limited upside

The 3 months correlation between CTPartners and Sumitomo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CTPartners Executive Search and Sumitomo Metal Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Metal Mining and CTPartners Executive 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 CTPartners Executive Search are associated (or correlated) with Sumitomo Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Metal Mining has no effect on the direction of CTPartners Executive i.e., CTPartners Executive and Sumitomo Metal go up and down completely randomly.

Pair Corralation between CTPartners Executive and Sumitomo Metal

If you would invest  565.00  in Sumitomo Metal Mining on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Sumitomo Metal Mining or generate 1.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

CTPartners Executive Search  vs.  Sumitomo Metal Mining

CTPartners Executive

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTPartners Executive Search has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, CTPartners Executive is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Sumitomo Metal Mining

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sumitomo Metal Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sumitomo Metal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CTPartners Executive and Sumitomo Metal

The main advantage of trading using opposite CTPartners Executive and Sumitomo Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTPartners Executive position performs unexpectedly, Sumitomo Metal 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 Metal will offset losses from the drop in Sumitomo Metal's long position.

The idea behind CTPartners Executive Search and Sumitomo Metal Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.