Correlation Between SANOK RUBBER and Northrop Grumman
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and Northrop Grumman 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 Northrop Grumman 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 Northrop Grumman, you can compare the effects of market volatilities on SANOK RUBBER and Northrop Grumman 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 Northrop Grumman. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and Northrop Grumman.
Diversification Opportunities for SANOK RUBBER and Northrop Grumman
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SANOK and Northrop is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and Northrop Grumman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northrop Grumman 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 Northrop Grumman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northrop Grumman has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and Northrop Grumman go up and down completely randomly.
Pair Corralation between SANOK RUBBER and Northrop Grumman
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 2.67 times more return on investment than Northrop Grumman. However, SANOK RUBBER is 2.67 times more volatile than Northrop Grumman. It trades about 0.12 of its potential returns per unit of risk. Northrop Grumman is currently generating about -0.01 per unit of risk. If you would invest 341.00 in SANOK RUBBER ZY on September 12, 2024 and sell it today you would earn a total of 99.00 from holding SANOK RUBBER ZY or generate 29.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. Northrop Grumman
Performance |
| Timeline |
| SANOK RUBBER ZY |
| Northrop Grumman |
SANOK RUBBER and Northrop Grumman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and Northrop Grumman
The main advantage of trading using opposite SANOK RUBBER and Northrop Grumman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, Northrop Grumman 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 Northrop Grumman will offset losses from the drop in Northrop Grumman's long position.| SANOK RUBBER vs. Bridgestone | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. SIVERS SEMICONDUCTORS AB | SANOK RUBBER vs. Norsk Hydro ASA |
| Northrop Grumman vs. TITANIUM TRANSPORTGROUP | Northrop Grumman vs. Gaztransport Technigaz SA | Northrop Grumman vs. DFS Furniture PLC | Northrop Grumman vs. Aedas Homes SA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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