Correlation Between Sumitomo Rubber and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Sumitomo Rubber and Zurich Insurance 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 Zurich Insurance 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 Zurich Insurance Group, you can compare the effects of market volatilities on Sumitomo Rubber and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumitomo Rubber and Zurich Insurance.
Diversification Opportunities for Sumitomo Rubber and Zurich Insurance
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sumitomo and Zurich is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sumitomo Rubber Industries and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of Sumitomo Rubber i.e., Sumitomo Rubber and Zurich Insurance go up and down completely randomly.
Pair Corralation between Sumitomo Rubber and Zurich Insurance
Assuming the 90 days horizon Sumitomo Rubber Industries is expected to generate 3.89 times more return on investment than Zurich Insurance. However, Sumitomo Rubber is 3.89 times more volatile than Zurich Insurance Group. It trades about 0.06 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.06 per unit of risk. If you would invest 357.00 in Sumitomo Rubber Industries on November 7, 2024 and sell it today you would earn a total of 753.00 from holding Sumitomo Rubber Industries or generate 210.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sumitomo Rubber Industries vs. Zurich Insurance Group
Performance |
| Timeline |
| Sumitomo Rubber Indu |
| Zurich Insurance |
Sumitomo Rubber and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumitomo Rubber and Zurich Insurance
The main advantage of trading using opposite Sumitomo Rubber and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumitomo Rubber position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| Sumitomo Rubber vs. Semiconductor Manufacturing International | Sumitomo Rubber vs. De Grey Mining | Sumitomo Rubber vs. Nordic Semiconductor ASA | Sumitomo Rubber vs. STGEORGE MINING LTD |
| Zurich Insurance vs. Luckin Coffee | Zurich Insurance vs. Jacquet Metal Service | Zurich Insurance vs. PARKEN Sport Entertainment | Zurich Insurance vs. VARIOUS EATERIES LS |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |