Correlation Between Sumitomo Rubber and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on Sumitomo Rubber and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and SPARTAN STORES.
Diversification Opportunities for Sumitomo Rubber and SPARTAN STORES
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sumitomo and SPARTAN is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and SPARTAN STORES
Assuming the 90 days horizon Sumitomo Rubber is expected to generate 2.58 times less return on investment than SPARTAN STORES. But when comparing it to its historical volatility, Sumitomo Rubber Industries is 1.49 times less risky than SPARTAN STORES. It trades about 0.06 of its potential returns per unit of risk. SPARTAN STORES is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,730 in SPARTAN STORES on November 30, 2024 and sell it today you would earn a total of 180.00 from holding SPARTAN STORES or generate 10.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. SPARTAN STORES
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| SPARTAN STORES |
Sumitomo Rubber and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and SPARTAN STORES
The main advantage of trading using opposite Sumitomo Rubber and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| Sumitomo Rubber vs. NAGOYA RAILROAD | Sumitomo Rubber vs. Brockhaus Capital Management | Sumitomo Rubber vs. Television Broadcasts Limited | Sumitomo Rubber vs. QUEEN S ROAD |
| SPARTAN STORES vs. Playtech plc | SPARTAN STORES vs. GLG LIFE TECH | SPARTAN STORES vs. ePlay Digital | SPARTAN STORES vs. Gaming and Leisure |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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