Correlation Between Sumitomo Metal and Allena Pharmaceuticals

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Sumitomo Metal and Allena Pharmaceuticals 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 Metal and Allena Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Metal Mining and Allena Pharmaceuticals, you can compare the effects of market volatilities on Sumitomo Metal and Allena Pharmaceuticals 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 Metal with a short position of Allena Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Metal and Allena Pharmaceuticals.

Diversification Opportunities for Sumitomo Metal and Allena Pharmaceuticals

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Sumitomo and Allena is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Metal Mining and Allena Pharmaceuticals Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allena Pharmaceuticals and Sumitomo Metal 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 Metal Mining are associated (or correlated) with Allena Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allena Pharmaceuticals has no effect on the direction of Sumitomo Metal i.e., Sumitomo Metal and Allena Pharmaceuticals go up and down completely randomly.

Pair Corralation between Sumitomo Metal and Allena Pharmaceuticals

Assuming the 90 days horizon Sumitomo Metal Mining is expected to generate 0.25 times more return on investment than Allena Pharmaceuticals. However, Sumitomo Metal Mining is 3.94 times less risky than Allena Pharmaceuticals. It trades about 0.0 of its potential returns per unit of risk. Allena Pharmaceuticals is currently generating about -0.06 per unit of risk. If you would invest  997.00  in Sumitomo Metal Mining on August 28, 2022 and sell it today you would lose (157.00)  from holding Sumitomo Metal Mining or give up 15.75% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy97.79%
ValuesDaily Returns

Sumitomo Metal Mining  vs.  Allena Pharmaceuticals Inc

 Performance (%) 
       Timeline  
Sumitomo Metal Mining 
Sumitomo Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Sumitomo Metal Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Sumitomo Metal may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Sumitomo Price Channel

Allena Pharmaceuticals 
Allena Performance
0 of 100
Over the last 90 days Allena Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Sumitomo Metal and Allena Pharmaceuticals Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sumitomo Metal and Allena Pharmaceuticals

The main advantage of trading using opposite Sumitomo Metal and Allena Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Metal position performs unexpectedly, Allena Pharmaceuticals 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 Allena Pharmaceuticals will offset losses from the drop in Allena Pharmaceuticals' long position.
Sumitomo Metal vs. Nano Mobile Healthcare
The idea behind Sumitomo Metal Mining and Allena Pharmaceuticals 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.
Allena Pharmaceuticals vs. Regeneron Pharmaceuticals
Allena Pharmaceuticals vs. Vertex Pharmaceutic
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

Other Complementary Tools

Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go