Correlation Between Procyon and Sumitomo Dainippon

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

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

Diversification Opportunities for Procyon and Sumitomo Dainippon

0.07

Correlation Coefficient

Procyon  Sumitomo Dainippon

Significant diversification

The 3 months correlation between Procyon and Sumitomo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Procyon and Sumitomo Dainippon Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Dainippon Pharma and Procyon 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 Procyon are associated (or correlated) with Sumitomo Dainippon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Dainippon Pharma has no effect on the direction of Procyon i.e., Procyon and Sumitomo Dainippon go up and down completely randomly.

Pair Corralation between Procyon and Sumitomo Dainippon

If you would invest  437.00  in Sumitomo Dainippon Pharma on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Sumitomo Dainippon Pharma or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Procyon  vs.  Sumitomo Dainippon Pharma

Procyon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Procyon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Sumitomo Dainippon Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sumitomo Dainippon Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sumitomo Dainippon is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Procyon and Sumitomo Dainippon

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

The idea behind Procyon and Sumitomo Dainippon Pharma 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.