Correlation Between Sumco Corp and Advantest Corp

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

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

Diversification Opportunities for Sumco Corp and Advantest Corp

0.0

Correlation Coefficient

Sumco Corp  Advantest Corp

Pay attention - limited upside

The 3 months correlation between Sumco and Advantest is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sumco Corp ADR and Advantest Corp DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantest Corp DRC and Sumco 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 Sumco Corp ADR are associated (or correlated) with Advantest Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantest Corp DRC has no effect on the direction of Sumco Corp i.e., Sumco Corp and Advantest Corp go up and down completely randomly.

Pair Corralation between Sumco Corp and Advantest Corp

If you would invest  1,423  in Sumco Corp ADR on May 4, 2025 and sell it today you would earn a total of  145.00  from holding Sumco Corp ADR or generate 10.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sumco Corp ADR  vs.  Advantest Corp DRC

Sumco Corp ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sumco Corp ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sumco Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Advantest Corp DRC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advantest Corp DRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Advantest Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sumco Corp and Advantest Corp

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

The idea behind Sumco Corp ADR and Advantest Corp DRC 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.