Correlation Between Bondbloxx ETF and Sumitomo Mitsui

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

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

Diversification Opportunities for Bondbloxx ETF and Sumitomo Mitsui

0.34

Correlation Coefficient

Bondbloxx ETF  Sumitomo Mitsui

Weak diversification

The 3 months correlation between Bondbloxx and Sumitomo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bondbloxx ETF Trust and Sumitomo Mitsui Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Trust and Bondbloxx ETF 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 Bondbloxx ETF Trust are associated (or correlated) with Sumitomo Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Trust has no effect on the direction of Bondbloxx ETF i.e., Bondbloxx ETF and Sumitomo Mitsui go up and down completely randomly.

Pair Corralation between Bondbloxx ETF and Sumitomo Mitsui

Given the investment horizon of 90 days Bondbloxx ETF is expected to generate 10.03 times less return on investment than Sumitomo Mitsui. But when comparing it to its historical volatility, Bondbloxx ETF Trust is 1.75 times less risky than Sumitomo Mitsui. It trades about 0.02 of its potential returns per unit of risk. Sumitomo Mitsui Trust is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  475.00  in Sumitomo Mitsui Trust on September 17, 2024 and sell it today you would earn a total of  21.00  from holding Sumitomo Mitsui Trust or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Bondbloxx ETF Trust  vs.  Sumitomo Mitsui Trust

Bondbloxx ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bondbloxx ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Sumitomo Mitsui Trust

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sumitomo Mitsui Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sumitomo Mitsui is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bondbloxx ETF and Sumitomo Mitsui

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

The idea behind Bondbloxx ETF Trust and Sumitomo Mitsui Trust 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.