Correlation Between Sumitomo Mitsui and BeiGene
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and BeiGene 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 BeiGene 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 BeiGene, you can compare the effects of market volatilities on Sumitomo Mitsui and BeiGene 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 BeiGene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and BeiGene.
Diversification Opportunities for Sumitomo Mitsui and BeiGene
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and BeiGene is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and BeiGene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BeiGene 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 BeiGene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BeiGene has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and BeiGene go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and BeiGene
Assuming the 90 days trading horizon Sumitomo Mitsui Financial is expected to generate 0.72 times more return on investment than BeiGene. However, Sumitomo Mitsui Financial is 1.39 times less risky than BeiGene. It trades about 0.23 of its potential returns per unit of risk. BeiGene is currently generating about -0.02 per unit of risk. If you would invest 6,874 in Sumitomo Mitsui Financial on September 24, 2024 and sell it today you would earn a total of 2,153 from holding Sumitomo Mitsui Financial or generate 31.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
Sumitomo Mitsui Financial vs. BeiGene
Performance |
Timeline |
Sumitomo Mitsui Financial |
BeiGene |
Sumitomo Mitsui and BeiGene Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sumitomo Mitsui and BeiGene
The main advantage of trading using opposite Sumitomo Mitsui and BeiGene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, BeiGene 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 BeiGene will offset losses from the drop in BeiGene's long position.Sumitomo Mitsui vs. Mitsubishi UFJ Financial | Sumitomo Mitsui vs. Banco Santander SA | Sumitomo Mitsui vs. Visa Inc | Sumitomo Mitsui vs. Airbnb Inc |
BeiGene vs. Novo Nordisk AS | BeiGene vs. Vertex Pharmaceuticals Incorporated | BeiGene vs. Moderna | BeiGene vs. BIONTECH SE DRN |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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