Correlation Between Deluxe and SUMIBK

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

By analyzing existing cross correlation between Deluxe and SUMIBK 293 17 SEP 41, you can compare the effects of market volatilities on Deluxe and SUMIBK 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 Deluxe with a short position of SUMIBK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and SUMIBK.

Diversification Opportunities for Deluxe and SUMIBK

-0.55

Correlation Coefficient

Deluxe  SUMIBK

Excellent diversification

The 3 months correlation between Deluxe and SUMIBK is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and SUMIBK 293 17 SEP 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMIBK 293 17 and Deluxe 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 Deluxe are associated (or correlated) with SUMIBK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMIBK 293 17 has no effect on the direction of Deluxe i.e., Deluxe and SUMIBK go up and down completely randomly.

Pair Corralation between Deluxe and SUMIBK

Considering the 90-day investment horizon Deluxe is expected to under-perform the SUMIBK. In addition to that, Deluxe is 1.63 times more volatile than SUMIBK 293 17 SEP 41. It trades about -0.05 of its total potential returns per unit of risk. SUMIBK 293 17 SEP 41 is currently generating about 0.2 per unit of volatility. If you would invest  7,199  in SUMIBK 293 17 SEP 41 on October 25, 2024 and sell it today you would earn a total of  162.00  from holding SUMIBK 293 17 SEP 41 or generate 2.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	57.89%
Values	Daily Returns

Deluxe  vs.  SUMIBK 293 17 SEP 41

Deluxe

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Deluxe are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Deluxe showed solid returns over the last few months and may actually be approaching a breakup point.

SUMIBK 293 17

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUMIBK 293 17 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SUMIBK is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Deluxe and SUMIBK

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

The idea behind Deluxe and SUMIBK 293 17 SEP 41 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.