Correlation Between SUMITOMO P and TOTAL BANGUN

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

By analyzing existing cross correlation between SUMITOMO P SP and TOTAL BANGUN PERSAD, you can compare the effects of market volatilities on SUMITOMO P and TOTAL BANGUN 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 P with a short position of TOTAL BANGUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUMITOMO P and TOTAL BANGUN.

Diversification Opportunities for SUMITOMO P and TOTAL BANGUN

-0.69

Correlation Coefficient

SUMITOMO P  TOTAL BANGUN

Excellent diversification

The 3 months correlation between SUMITOMO and TOTAL is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SUMITOMO P SP and TOTAL BANGUN PERSAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL BANGUN PERSAD and SUMITOMO P 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 P SP are associated (or correlated) with TOTAL BANGUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL BANGUN PERSAD has no effect on the direction of SUMITOMO P i.e., SUMITOMO P and TOTAL BANGUN go up and down completely randomly.

Pair Corralation between SUMITOMO P and TOTAL BANGUN

Assuming the 90 days trading horizon SUMITOMO P SP is expected to generate 0.3 times more return on investment than TOTAL BANGUN. However, SUMITOMO P SP is 3.28 times less risky than TOTAL BANGUN. It trades about 0.05 of its potential returns per unit of risk. TOTAL BANGUN PERSAD is currently generating about -0.04 per unit of risk. If you would invest  2,060  in SUMITOMO P SP on December 31, 2024 and sell it today you would earn a total of  100.00  from holding SUMITOMO P SP or generate 4.85% return on investment over 90 days.

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

SUMITOMO P SP  vs.  TOTAL BANGUN PERSAD

SUMITOMO P SP

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SUMITOMO P SP are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, SUMITOMO P is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

TOTAL BANGUN PERSAD

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOTAL BANGUN PERSAD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with SUMITOMO P and TOTAL BANGUN

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

The idea behind SUMITOMO P SP and TOTAL BANGUN PERSAD 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.