Correlation Between Lasertec and Sumco

Can any of the company-specific risk be diversified away by investing in both Lasertec and Sumco 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 Lasertec and Sumco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lasertec and Sumco, you can compare the effects of market volatilities on Lasertec and Sumco 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 Lasertec with a short position of Sumco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lasertec and Sumco.

Diversification Opportunities for Lasertec and Sumco

0.62

Correlation Coefficient

Lasertec  Sumco

Poor diversification

The 3 months correlation between Lasertec and Sumco is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Lasertec and Sumco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumco and Lasertec 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 Lasertec are associated (or correlated) with Sumco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumco has no effect on the direction of Lasertec i.e., Lasertec and Sumco go up and down completely randomly.

Pair Corralation between Lasertec and Sumco

Assuming the 90 days horizon Lasertec is expected to generate 1.04 times more return on investment than Sumco. However, Lasertec is 1.04 times more volatile than Sumco. It trades about 0.26 of its potential returns per unit of risk. Sumco is currently generating about 0.11 per unit of risk. If you would invest  1,990  in Lasertec on August 4, 2025 and sell it today you would earn a total of  2,021  from holding Lasertec or generate 101.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Lasertec  vs.  Sumco

Lasertec

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lasertec are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Lasertec showed solid returns over the last few months and may actually be approaching a breakup point.

Sumco

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Sumco are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Sumco reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lasertec and Sumco

The main advantage of trading using opposite Lasertec and Sumco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lasertec position performs unexpectedly, Sumco 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 Sumco will offset losses from the drop in Sumco's long position.

The idea behind Lasertec and Sumco 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.