Correlation Between Sumitomo Rubber and Hyster-Yale Materials
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and Hyster-Yale Materials 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 Hyster-Yale Materials 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 Hyster Yale Materials Handling, you can compare the effects of market volatilities on Sumitomo Rubber and Hyster-Yale Materials 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 Hyster-Yale Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and Hyster-Yale Materials.
Diversification Opportunities for Sumitomo Rubber and Hyster-Yale Materials
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sumitomo and Hyster-Yale is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials 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 Hyster-Yale Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and Hyster-Yale Materials go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and Hyster-Yale Materials
Assuming the 90 days horizon Sumitomo Rubber Industries is expected to generate 0.5 times more return on investment than Hyster-Yale Materials. However, Sumitomo Rubber Industries is 1.99 times less risky than Hyster-Yale Materials. It trades about 0.31 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about -0.08 per unit of risk. If you would invest 905.00 in Sumitomo Rubber Industries on August 31, 2024 and sell it today you would earn a total of 125.00 from holding Sumitomo Rubber Industries or generate 13.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. Hyster Yale Materials Handling
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| Hyster Yale Materials |
Sumitomo Rubber and Hyster-Yale Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and Hyster-Yale Materials
The main advantage of trading using opposite Sumitomo Rubber and Hyster-Yale Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, Hyster-Yale Materials 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 Hyster-Yale Materials will offset losses from the drop in Hyster-Yale Materials' long position.| Sumitomo Rubber vs. FIREWEED METALS P | Sumitomo Rubber vs. Adtalem Global Education | Sumitomo Rubber vs. DeVry Education Group | Sumitomo Rubber vs. TAL Education Group |
| Hyster-Yale Materials vs. Superior Plus Corp | Hyster-Yale Materials vs. NMI Holdings | Hyster-Yale Materials vs. Origin Agritech | Hyster-Yale Materials vs. SIVERS SEMICONDUCTORS AB |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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