Correlation Between Sumitomo Rubber and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and XTANT MEDICAL 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 XTANT MEDICAL 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 XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Sumitomo Rubber and XTANT MEDICAL 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 XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and XTANT MEDICAL.
Diversification Opportunities for Sumitomo Rubber and XTANT MEDICAL
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumitomo and XTANT is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS 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 XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and XTANT MEDICAL
Assuming the 90 days horizon Sumitomo Rubber Industries is expected to generate 0.7 times more return on investment than XTANT MEDICAL. However, Sumitomo Rubber Industries is 1.42 times less risky than XTANT MEDICAL. It trades about 0.07 of its potential returns per unit of risk. XTANT MEDICAL HLDGS is currently generating about -0.13 per unit of risk. If you would invest 1,040 in Sumitomo Rubber Industries on September 24, 2024 and sell it today you would earn a total of 20.00 from holding Sumitomo Rubber Industries or generate 1.92% 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. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| XTANT MEDICAL HLDGS |
Sumitomo Rubber and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and XTANT MEDICAL
The main advantage of trading using opposite Sumitomo Rubber and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.| Sumitomo Rubber vs. Bridgestone | Sumitomo Rubber vs. Advanced Drainage Systems | Sumitomo Rubber vs. The Goodyear Tire | Sumitomo Rubber vs. Zeon Corporation |
| XTANT MEDICAL vs. SHIN ETSU CHEMICAL | XTANT MEDICAL vs. SEKISUI CHEMICAL | XTANT MEDICAL vs. Soken Chemical Engineering | XTANT MEDICAL vs. Silicon Motion Technology |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |