Correlation Between Sumitomo Rubber and Chuangs China
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on Sumitomo Rubber and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and Chuangs China.
Diversification Opportunities for Sumitomo Rubber and Chuangs China
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sumitomo and Chuangs is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and Chuangs China go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and Chuangs China
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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. Chuangs China Investments
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| Chuangs China Investments |
Sumitomo Rubber and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and Chuangs China
The main advantage of trading using opposite Sumitomo Rubber and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China'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 |
| Chuangs China vs. RCM TECHNOLOGIES | Chuangs China vs. Spirent Communications plc | Chuangs China vs. CITIC Telecom International | Chuangs China vs. Lion Biotechnologies |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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