Correlation Between Sumitomo Mitsui and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Sumitomo Mitsui and US Bancorp 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 US Bancorp 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 US Bancorp, you can compare the effects of market volatilities on Sumitomo Mitsui and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Mitsui and US Bancorp.
Diversification Opportunities for Sumitomo Mitsui and US Bancorp
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sumitomo and USB is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Mitsui Financial and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of Sumitomo Mitsui i.e., Sumitomo Mitsui and US Bancorp go up and down completely randomly.
Pair Corralation between Sumitomo Mitsui and US Bancorp
Given the investment horizon of 90 days Sumitomo Mitsui Financial is expected to generate 1.23 times more return on investment than US Bancorp. However, Sumitomo Mitsui is 1.23 times more volatile than US Bancorp. It trades about 0.06 of its potential returns per unit of risk. US Bancorp is currently generating about 0.03 per unit of risk. If you would invest 1,626 in Sumitomo Mitsui Financial on August 28, 2025 and sell it today you would earn a total of 89.00 from holding Sumitomo Mitsui Financial or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Mitsui Financial vs. US Bancorp
Performance |
| Timeline |
| Sumitomo Mitsui Financial |
| US Bancorp |
Sumitomo Mitsui and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Mitsui and US Bancorp
The main advantage of trading using opposite Sumitomo Mitsui and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Mitsui position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| Sumitomo Mitsui vs. FullNet Communications | Sumitomo Mitsui vs. Technology Telecommunication Acquisition | Sumitomo Mitsui vs. Avistar Communications Corp | Sumitomo Mitsui vs. SIGNA Sports United |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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