Correlation Between Everspin Technologies and SUMITOMO

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

By analyzing existing cross correlation between Everspin Technologies and SUMITOMO MITSUI FINANCIAL, you can compare the effects of market volatilities on Everspin Technologies and SUMITOMO 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 Everspin Technologies with a short position of SUMITOMO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everspin Technologies and SUMITOMO.

Diversification Opportunities for Everspin Technologies and SUMITOMO

-0.45

Correlation Coefficient

Everspin Technologies  SUMITOMO

Very good diversification

The 3 months correlation between Everspin and SUMITOMO is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Everspin Technologies and SUMITOMO MITSUI FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMITOMO MITSUI FINANCIAL and Everspin Technologies 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 Everspin Technologies are associated (or correlated) with SUMITOMO. 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 FINANCIAL has no effect on the direction of Everspin Technologies i.e., Everspin Technologies and SUMITOMO go up and down completely randomly.

Pair Corralation between Everspin Technologies and SUMITOMO

Given the investment horizon of 90 days Everspin Technologies is expected to generate 3.96 times more return on investment than SUMITOMO. However, Everspin Technologies is 3.96 times more volatile than SUMITOMO MITSUI FINANCIAL. It trades about 0.11 of its potential returns per unit of risk. SUMITOMO MITSUI FINANCIAL is currently generating about -0.2 per unit of risk. If you would invest  538.00  in Everspin Technologies on September 14, 2024 and sell it today you would earn a total of  106.50  from holding Everspin Technologies or generate 19.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	84.38%
Values	Daily Returns

Everspin Technologies  vs.  SUMITOMO MITSUI FINANCIAL

Everspin Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Everspin Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Everspin Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

SUMITOMO MITSUI FINANCIAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUMITOMO MITSUI FINANCIAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SUMITOMO MITSUI FINANCIAL investors.

Pair Trading with Everspin Technologies and SUMITOMO

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

The idea behind Everspin Technologies and SUMITOMO MITSUI FINANCIAL 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.