Correlation Between Sumitomo Rubber and AOI Electronics
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and AOI Electronics 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 AOI Electronics 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 AOI Electronics Co, you can compare the effects of market volatilities on Sumitomo Rubber and AOI Electronics 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 AOI Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and AOI Electronics.
Diversification Opportunities for Sumitomo Rubber and AOI Electronics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sumitomo and AOI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and AOI Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AOI Electronics 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 AOI Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AOI Electronics has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and AOI Electronics go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and AOI Electronics
If you would invest 940.00 in Sumitomo Rubber Industries on August 25, 2024 and sell it today you would earn a total of 110.00 from holding Sumitomo Rubber Industries or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. AOI Electronics Co
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| AOI Electronics |
Sumitomo Rubber and AOI Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and AOI Electronics
The main advantage of trading using opposite Sumitomo Rubber and AOI Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, AOI Electronics 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 AOI Electronics will offset losses from the drop in AOI Electronics' long position.| Sumitomo Rubber vs. Bridgestone | Sumitomo Rubber vs. Advanced Drainage Systems | Sumitomo Rubber vs. Zeon Corporation | Sumitomo Rubber vs. Polyplex Public |
| AOI Electronics vs. NVIDIA | AOI Electronics vs. NVIDIA | AOI Electronics vs. QUALCOMM Incorporated | AOI Electronics vs. Advanced Micro Devices |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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