Correlation Between Sumitomo Rubber and CK Infrastructure
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and CK Infrastructure 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 CK Infrastructure 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 CK Infrastructure Holdings, you can compare the effects of market volatilities on Sumitomo Rubber and CK Infrastructure 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 CK Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and CK Infrastructure.
Diversification Opportunities for Sumitomo Rubber and CK Infrastructure
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sumitomo and CHH is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and CK Infrastructure Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Infrastructure 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 CK Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Infrastructure has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and CK Infrastructure go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and CK Infrastructure
Assuming the 90 days horizon Sumitomo Rubber Industries is expected to generate 0.81 times more return on investment than CK Infrastructure. However, Sumitomo Rubber Industries is 1.23 times less risky than CK Infrastructure. It trades about 0.17 of its potential returns per unit of risk. CK Infrastructure Holdings is currently generating about 0.0 per unit of risk. If you would invest 995.00 in Sumitomo Rubber Industries on September 12, 2024 and sell it today you would earn a total of 55.00 from holding Sumitomo Rubber Industries or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. CK Infrastructure Holdings
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| CK Infrastructure |
Sumitomo Rubber and CK Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and CK Infrastructure
The main advantage of trading using opposite Sumitomo Rubber and CK Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, CK Infrastructure 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 CK Infrastructure will offset losses from the drop in CK Infrastructure'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 |
| CK Infrastructure vs. ANGLER GAMING PLC | CK Infrastructure vs. Media and Games | CK Infrastructure vs. EAST SIDE GAMES | CK Infrastructure vs. Zijin Mining Group |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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