Correlation Between Sumitomo and Grupo Carso
Can any of the company-specific risk be diversified away by investing in both Sumitomo and Grupo Carso 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 and Grupo Carso into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo and Grupo Carso SAB, you can compare the effects of market volatilities on Sumitomo and Grupo Carso 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 with a short position of Grupo Carso. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo and Grupo Carso.
Diversification Opportunities for Sumitomo and Grupo Carso
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and Grupo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB and Sumitomo 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 are associated (or correlated) with Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of Sumitomo i.e., Sumitomo and Grupo Carso go up and down completely randomly.
Pair Corralation between Sumitomo and Grupo Carso
Assuming the 90 days trading horizon Sumitomo is expected to generate 1.25 times more return on investment than Grupo Carso. However, Sumitomo is 1.25 times more volatile than Grupo Carso SAB. It trades about 0.08 of its potential returns per unit of risk. Grupo Carso SAB is currently generating about 0.02 per unit of risk. If you would invest 2,049 in Sumitomo on December 29, 2024 and sell it today you would earn a total of 239.00 from holding Sumitomo or generate 11.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sumitomo vs. Grupo Carso SAB
Performance |
Timeline |
Sumitomo |
Grupo Carso SAB |
Sumitomo and Grupo Carso Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sumitomo and Grupo Carso
The main advantage of trading using opposite Sumitomo and Grupo Carso positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo position performs unexpectedly, Grupo Carso 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 Grupo Carso will offset losses from the drop in Grupo Carso's long position.Sumitomo vs. STRAYER EDUCATION | Sumitomo vs. TAL Education Group | Sumitomo vs. Xinhua Winshare Publishing | Sumitomo vs. DeVry Education Group |
Grupo Carso vs. STORAGEVAULT CANADA INC | Grupo Carso vs. Columbia Sportswear | Grupo Carso vs. Playtech plc | Grupo Carso vs. National Storage Affiliates |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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