Correlation Between Sumitomo Rubber and G III
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and G III 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 G III 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 G III Apparel Group, you can compare the effects of market volatilities on Sumitomo Rubber and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and G III.
Diversification Opportunities for Sumitomo Rubber and G III
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sumitomo and GI4 is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and G III go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and G III
Assuming the 90 days horizon Sumitomo Rubber Industries is expected to generate 1.95 times more return on investment than G III. However, Sumitomo Rubber is 1.95 times more volatile than G III Apparel Group. It trades about 0.05 of its potential returns per unit of risk. G III Apparel Group is currently generating about 0.06 per unit of risk. If you would invest 355.00 in Sumitomo Rubber Industries on October 29, 2024 and sell it today you would earn a total of 705.00 from holding Sumitomo Rubber Industries or generate 198.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. G III Apparel Group
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| G III Apparel |
Sumitomo Rubber and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and G III
The main advantage of trading using opposite Sumitomo Rubber and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| Sumitomo Rubber vs. DATAGROUP SE | Sumitomo Rubber vs. Electronic Arts | Sumitomo Rubber vs. ULTRA CLEAN HLDGS | Sumitomo Rubber vs. Datadog |
| G III vs. CARDINAL HEALTH | G III vs. Calibre Mining Corp | G III vs. Universal Health Realty | G III vs. CVS Health |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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