Correlation Between Sumitomo Mitsui and AMETEK,

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

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

Diversification Opportunities for Sumitomo Mitsui and AMETEK,

0.6

Correlation Coefficient

Sumitomo Mitsui  AMETEK,

Poor diversification

The 3 months correlation between Sumitomo and AMETEK, is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and AMETEK, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMETEK, and Sumitomo Mitsui 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 Sumitomo Mitsui Financial are associated (or correlated) with AMETEK,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMETEK, has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and AMETEK, go up and down completely randomly.

Pair Corralation between Sumitomo Mitsui and AMETEK,

Assuming the 90 days trading horizon Sumitomo Mitsui Financial is expected to generate 0.74 times more return on investment than AMETEK,. However, Sumitomo Mitsui Financial is 1.35 times less risky than AMETEK,. It trades about -0.17 of its potential returns per unit of risk. AMETEK, is currently generating about -0.22 per unit of risk. If you would invest  9,198  in Sumitomo Mitsui Financial on October 10, 2024 and sell it today you would lose (274.00) from holding Sumitomo Mitsui Financial or give up 2.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sumitomo Mitsui Financial  vs.  AMETEK,

Sumitomo Mitsui Financial

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sumitomo Mitsui Financial are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Sumitomo Mitsui sustained solid returns over the last few months and may actually be approaching a breakup point.

AMETEK,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AMETEK, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, AMETEK, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sumitomo Mitsui and AMETEK,

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

The idea behind Sumitomo Mitsui Financial and AMETEK, 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.