Correlation Between ZhongAn Online and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and Sumitomo Rubber 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 ZhongAn Online and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZhongAn Online P and Sumitomo Rubber Industries, you can compare the effects of market volatilities on ZhongAn Online and Sumitomo Rubber 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 ZhongAn Online with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and Sumitomo Rubber.
Diversification Opportunities for ZhongAn Online and Sumitomo Rubber
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ZhongAn and Sumitomo is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and Sumitomo Rubber Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Rubber Indu and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with Sumitomo Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Rubber Indu has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between ZhongAn Online and Sumitomo Rubber
Assuming the 90 days trading horizon ZhongAn Online is expected to generate 7.84 times less return on investment than Sumitomo Rubber. In addition to that, ZhongAn Online is 1.66 times more volatile than Sumitomo Rubber Industries. It trades about 0.01 of its total potential returns per unit of risk. Sumitomo Rubber Industries is currently generating about 0.07 per unit of volatility. If you would invest 890.00 in Sumitomo Rubber Industries on October 26, 2024 and sell it today you would earn a total of 190.00 from holding Sumitomo Rubber Industries or generate 21.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| ZhongAn Online P |
| Sumitomo Rubber Indu |
ZhongAn Online and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and Sumitomo Rubber
The main advantage of trading using opposite ZhongAn Online and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, Sumitomo Rubber 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 Sumitomo Rubber will offset losses from the drop in Sumitomo Rubber's long position.| ZhongAn Online vs. Sumitomo Rubber Industries | ZhongAn Online vs. Rayonier Advanced Materials | ZhongAn Online vs. Materialise NV | ZhongAn Online vs. SCANSOURCE |
| Sumitomo Rubber vs. UNIQA INSURANCE GR | Sumitomo Rubber vs. Zurich Insurance Group | Sumitomo Rubber vs. UNIVERSAL MUSIC GROUP | Sumitomo Rubber vs. MOVIE GAMES 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |