Correlation Between Sumitomo Rubber and Polyplex (Thailand)
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and Polyplex (Thailand) 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 Polyplex (Thailand) 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 Polyplex Public, you can compare the effects of market volatilities on Sumitomo Rubber and Polyplex (Thailand) 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 Polyplex (Thailand). Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and Polyplex (Thailand).
Diversification Opportunities for Sumitomo Rubber and Polyplex (Thailand)
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sumitomo and Polyplex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and Polyplex Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polyplex (Thailand) 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 Polyplex (Thailand). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polyplex (Thailand) has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and Polyplex (Thailand) go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and Polyplex (Thailand)
Assuming the 90 days horizon Sumitomo Rubber is expected to generate 11.79 times less return on investment than Polyplex (Thailand). But when comparing it to its historical volatility, Sumitomo Rubber Industries is 3.75 times less risky than Polyplex (Thailand). It trades about 0.03 of its potential returns per unit of risk. Polyplex Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9.63 in Polyplex Public on August 25, 2024 and sell it today you would earn a total of 22.37 from holding Polyplex Public or generate 232.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. Polyplex Public
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| Polyplex (Thailand) |
Sumitomo Rubber and Polyplex (Thailand) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and Polyplex (Thailand)
The main advantage of trading using opposite Sumitomo Rubber and Polyplex (Thailand) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, Polyplex (Thailand) 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 Polyplex (Thailand) will offset losses from the drop in Polyplex (Thailand)'s long position.| Sumitomo Rubber vs. Bridgestone | Sumitomo Rubber vs. Advanced Drainage Systems | Sumitomo Rubber vs. Zeon Corporation | Sumitomo Rubber vs. Polyplex Public |
| Polyplex (Thailand) vs. Goosehead Insurance | Polyplex (Thailand) vs. SHIN ETSU CHEMICAL | Polyplex (Thailand) vs. ZURICH INSURANCE GROUP | Polyplex (Thailand) vs. Japan Post Insurance |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges |