Correlation Between SUMITOMO CORP and Fanuc
Can any of the company-specific risk be diversified away by investing in both SUMITOMO CORP and Fanuc 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 CORP and Fanuc 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 Fanuc, you can compare the effects of market volatilities on SUMITOMO CORP and Fanuc 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 CORP with a short position of Fanuc. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUMITOMO CORP and Fanuc.
Diversification Opportunities for SUMITOMO CORP and Fanuc
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SUMITOMO and Fanuc is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SUMITOMO P SP and Fanuc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanuc and SUMITOMO CORP 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 Fanuc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanuc has no effect on the direction of SUMITOMO CORP i.e., SUMITOMO CORP and Fanuc go up and down completely randomly.
Pair Corralation between SUMITOMO CORP and Fanuc
Assuming the 90 days trading horizon SUMITOMO CORP is expected to generate 2.26 times less return on investment than Fanuc. But when comparing it to its historical volatility, SUMITOMO P SP is 2.0 times less risky than Fanuc. It trades about 0.07 of its potential returns per unit of risk. Fanuc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,261 in Fanuc on April 25, 2025 and sell it today you would earn a total of 233.00 from holding Fanuc or generate 10.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SUMITOMO P SP vs. Fanuc
Performance |
Timeline |
SUMITOMO P SP |
Fanuc |
SUMITOMO CORP and Fanuc Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SUMITOMO CORP and Fanuc
The main advantage of trading using opposite SUMITOMO CORP and Fanuc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUMITOMO CORP position performs unexpectedly, Fanuc 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 Fanuc will offset losses from the drop in Fanuc's long position.SUMITOMO CORP vs. Sabre Insurance Group | SUMITOMO CORP vs. Playmates Toys Limited | SUMITOMO CORP vs. Japan Post Insurance | SUMITOMO CORP vs. PENN NATL GAMING |
Fanuc vs. Applied Materials | Fanuc vs. MAROC TELECOM | Fanuc vs. THRACE PLASTICS | Fanuc vs. CITIC Telecom International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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