Correlation Between Sumitomo Rubber and Haverty Furniture
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and Haverty Furniture 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 Haverty Furniture 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 Haverty Furniture Companies, you can compare the effects of market volatilities on Sumitomo Rubber and Haverty Furniture 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 Haverty Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and Haverty Furniture.
Diversification Opportunities for Sumitomo Rubber and Haverty Furniture
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and Haverty is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and Haverty Furniture Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haverty Furniture 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 Haverty Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haverty Furniture has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and Haverty Furniture go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and Haverty Furniture
Assuming the 90 days horizon Sumitomo Rubber Industries is expected to generate 0.87 times more return on investment than Haverty Furniture. However, Sumitomo Rubber Industries is 1.15 times less risky than Haverty Furniture. It trades about 0.11 of its potential returns per unit of risk. Haverty Furniture Companies is currently generating about -0.02 per unit of risk. If you would invest 915.00 in Sumitomo Rubber Industries on September 12, 2024 and sell it today you would earn a total of 135.00 from holding Sumitomo Rubber Industries or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. Haverty Furniture Companies
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| Haverty Furniture |
Sumitomo Rubber and Haverty Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and Haverty Furniture
The main advantage of trading using opposite Sumitomo Rubber and Haverty Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, Haverty Furniture 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 Haverty Furniture will offset losses from the drop in Haverty Furniture's long position.| Sumitomo Rubber vs. Superior Plus Corp | Sumitomo Rubber vs. NMI Holdings | Sumitomo Rubber vs. SIVERS SEMICONDUCTORS AB | Sumitomo Rubber vs. NorAm Drilling AS |
| Haverty Furniture vs. Lowes Companies | Haverty Furniture vs. Superior Plus Corp | Haverty Furniture vs. SIVERS SEMICONDUCTORS AB | Haverty Furniture vs. NorAm Drilling AS |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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