Correlation Between Haverty Furniture and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture 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 Haverty Furniture and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haverty Furniture Companies and Sumitomo Rubber Industries, you can compare the effects of market volatilities on Haverty Furniture 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 Haverty Furniture with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and Sumitomo Rubber.
Diversification Opportunities for Haverty Furniture and Sumitomo Rubber
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Haverty and Sumitomo is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies 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 Haverty Furniture 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 Haverty Furniture Companies 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 Haverty Furniture i.e., Haverty Furniture and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between Haverty Furniture and Sumitomo Rubber
Assuming the 90 days horizon Haverty Furniture is expected to generate 301.0 times less return on investment than Sumitomo Rubber. But when comparing it to its historical volatility, Haverty Furniture Companies is 2.5 times less risky than Sumitomo Rubber. It trades about 0.0 of its potential returns per unit of risk. Sumitomo Rubber Industries is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 346.00 in Sumitomo Rubber Industries on September 5, 2024 and sell it today you would earn a total of 694.00 from holding Sumitomo Rubber Industries or generate 200.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Haverty Furniture Companies vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| Haverty Furniture |
| Sumitomo Rubber Indu |
Haverty Furniture and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and Sumitomo Rubber
The main advantage of trading using opposite Haverty Furniture and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture 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.| Haverty Furniture vs. Sumitomo Mitsui Construction | Haverty Furniture vs. Major Drilling Group | Haverty Furniture vs. HYDROFARM HLD GRP | Haverty Furniture vs. WIMFARM SA EO |
| Sumitomo Rubber vs. Zeon Corporation | Sumitomo Rubber vs. Semperit Aktiengesellschaft Holding | Sumitomo Rubber vs. PT Gajah Tunggal |
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.
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