Correlation Between Sumitomo Rubber and Freenet AG
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By analyzing existing cross correlation between Sumitomo Rubber Industries and freenet AG, you can compare the effects of market volatilities on Sumitomo Rubber and Freenet AG 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 Freenet AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and Freenet AG.
Diversification Opportunities for Sumitomo Rubber and Freenet AG
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumitomo and Freenet is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and freenet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on freenet AG 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 Freenet AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of freenet AG has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and Freenet AG go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and Freenet AG
Assuming the 90 days horizon Sumitomo Rubber is expected to generate 6.78 times less return on investment than Freenet AG. In addition to that, Sumitomo Rubber is 2.14 times more volatile than freenet AG. It trades about 0.01 of its total potential returns per unit of risk. freenet AG is currently generating about 0.08 per unit of volatility. If you would invest 2,370 in freenet AG on September 4, 2024 and sell it today you would earn a total of 560.00 from holding freenet AG or generate 23.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. freenet AG
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| freenet AG |
Sumitomo Rubber and Freenet AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and Freenet AG
The main advantage of trading using opposite Sumitomo Rubber and Freenet AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, Freenet AG 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 Freenet AG will offset losses from the drop in Freenet AG's long position.| Sumitomo Rubber vs. Zeon Corporation | Sumitomo Rubber vs. Semperit Aktiengesellschaft Holding | Sumitomo Rubber vs. PT Gajah Tunggal |
| Freenet AG vs. Hyster Yale Materials Handling | Freenet AG vs. Vulcan Materials | Freenet AG vs. Sumitomo Rubber Industries | Freenet AG vs. GOODYEAR T RUBBER |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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