Correlation Between Sumitomo Rubber and Koninklijke Ahold
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By analyzing existing cross correlation between Sumitomo Rubber Industries and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Sumitomo Rubber and Koninklijke Ahold 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 Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and Koninklijke Ahold.
Diversification Opportunities for Sumitomo Rubber and Koninklijke Ahold
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sumitomo and Koninklijke is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold 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 Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and Koninklijke Ahold
Assuming the 90 days horizon Sumitomo Rubber Industries is expected to generate 3.85 times more return on investment than Koninklijke Ahold. However, Sumitomo Rubber is 3.85 times more volatile than Koninklijke Ahold Delhaize. It trades about 0.05 of its potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.04 per unit of risk. If you would invest 355.00 in Sumitomo Rubber Industries on September 13, 2024 and sell it today you would earn a total of 695.00 from holding Sumitomo Rubber Industries or generate 195.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.4% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| Koninklijke Ahold |
Sumitomo Rubber and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and Koninklijke Ahold
The main advantage of trading using opposite Sumitomo Rubber and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold'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 |
| Koninklijke Ahold vs. EAGLE MATERIALS | Koninklijke Ahold vs. Rayonier Advanced Materials | Koninklijke Ahold vs. SANOK RUBBER ZY | Koninklijke Ahold vs. Sumitomo Rubber Industries |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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