Correlation Between SANOK RUBBER and GOODYEAR T
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and GOODYEAR T 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 SANOK RUBBER and GOODYEAR T into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and GOODYEAR T RUBBER, you can compare the effects of market volatilities on SANOK RUBBER and GOODYEAR T 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 SANOK RUBBER with a short position of GOODYEAR T. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and GOODYEAR T.
Diversification Opportunities for SANOK RUBBER and GOODYEAR T
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SANOK and GOODYEAR is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and GOODYEAR T RUBBER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODYEAR T RUBBER and SANOK 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 SANOK RUBBER ZY are associated (or correlated) with GOODYEAR T. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODYEAR T RUBBER has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and GOODYEAR T go up and down completely randomly.
Pair Corralation between SANOK RUBBER and GOODYEAR T
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 1.03 times more return on investment than GOODYEAR T. However, SANOK RUBBER is 1.03 times more volatile than GOODYEAR T RUBBER. It trades about 0.08 of its potential returns per unit of risk. GOODYEAR T RUBBER is currently generating about 0.01 per unit of risk. If you would invest 167.00 in SANOK RUBBER ZY on August 26, 2024 and sell it today you would earn a total of 267.00 from holding SANOK RUBBER ZY or generate 159.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. GOODYEAR T RUBBER
Performance |
| Timeline |
| SANOK RUBBER ZY |
| GOODYEAR T RUBBER |
SANOK RUBBER and GOODYEAR T Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and GOODYEAR T
The main advantage of trading using opposite SANOK RUBBER and GOODYEAR T positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, GOODYEAR T 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 GOODYEAR T will offset losses from the drop in GOODYEAR T's long position.| SANOK RUBBER vs. PT Astra International | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. NMI Holdings | SANOK RUBBER vs. Origin Agritech |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |