Correlation Between Sumitomo Rubber and Materialise
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and Materialise 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 Rubber and Materialise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumitomo Rubber Industries and Materialise NV, you can compare the effects of market volatilities on Sumitomo Rubber and Materialise 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 Rubber with a short position of Materialise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and Materialise.
Diversification Opportunities for Sumitomo Rubber and Materialise
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sumitomo and Materialise is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and Materialise NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Materialise NV and Sumitomo Rubber 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 Rubber Industries are associated (or correlated) with Materialise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Materialise NV has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and Materialise go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and Materialise
Assuming the 90 days horizon Sumitomo Rubber Industries is expected to under-perform the Materialise. But the stock apears to be less risky and, when comparing its historical volatility, Sumitomo Rubber Industries is 2.88 times less risky than Materialise. The stock trades about -0.07 of its potential returns per unit of risk. The Materialise NV is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 685.00 in Materialise NV on November 1, 2024 and sell it today you would earn a total of 135.00 from holding Materialise NV or generate 19.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. Materialise NV
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| Materialise NV |
Sumitomo Rubber and Materialise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and Materialise
The main advantage of trading using opposite Sumitomo Rubber and Materialise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, Materialise 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 Materialise will offset losses from the drop in Materialise's long position.| Sumitomo Rubber vs. Tencent Music Entertainment | Sumitomo Rubber vs. ONWARD MEDICAL BV | Sumitomo Rubber vs. CVR Medical Corp | Sumitomo Rubber vs. Japan Medical Dynamic |
| Materialise vs. Cal Maine Foods | Materialise vs. COFCO Joycome Foods | Materialise vs. TYSON FOODS A | Materialise vs. PLANT VEDA FOODS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |