Correlation Between Sumitomo Realty and Swire Properties
Can any of the company-specific risk be diversified away by investing in both Sumitomo Realty and Swire Properties 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 Realty and Swire Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Realty Development and Swire Properties Limited, you can compare the effects of market volatilities on Sumitomo Realty and Swire Properties 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 Realty with a short position of Swire Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Realty and Swire Properties.
Diversification Opportunities for Sumitomo Realty and Swire Properties
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sumitomo and Swire is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Realty Development and Swire Properties Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swire Properties and Sumitomo Realty 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 Realty Development are associated (or correlated) with Swire Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swire Properties has no effect on the direction of Sumitomo Realty i.e., Sumitomo Realty and Swire Properties go up and down completely randomly.
Pair Corralation between Sumitomo Realty and Swire Properties
Assuming the 90 days horizon Sumitomo Realty is expected to generate 16.62 times less return on investment than Swire Properties. In addition to that, Sumitomo Realty is 1.02 times more volatile than Swire Properties Limited. It trades about 0.0 of its total potential returns per unit of risk. Swire Properties Limited is currently generating about 0.08 per unit of volatility. If you would invest 269.00 in Swire Properties Limited on August 28, 2025 and sell it today you would earn a total of 18.00 from holding Swire Properties Limited or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Sumitomo Realty Development vs. Swire Properties Limited
Performance |
| Timeline |
| Sumitomo Realty Deve |
| Swire Properties |
Sumitomo Realty and Swire Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Realty and Swire Properties
The main advantage of trading using opposite Sumitomo Realty and Swire Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Realty position performs unexpectedly, Swire Properties 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 Swire Properties will offset losses from the drop in Swire Properties' long position.| Sumitomo Realty vs. Major Drilling Group | Sumitomo Realty vs. Canadian Utilities Limited | Sumitomo Realty vs. Seneca Foods | Sumitomo Realty vs. United Natural Foods |
| Swire Properties vs. Eastman Chemical | Swire Properties vs. Triumph Apparel | Swire Properties vs. ICL Israel Chemicals | Swire Properties vs. Critic Clothing |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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