Correlation Between GRUPO CARSO-A1 and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both GRUPO CARSO-A1 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 GRUPO CARSO-A1 and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRUPO CARSO A1 and Sumitomo Rubber Industries, you can compare the effects of market volatilities on GRUPO CARSO-A1 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 GRUPO CARSO-A1 with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRUPO CARSO-A1 and Sumitomo Rubber.
Diversification Opportunities for GRUPO CARSO-A1 and Sumitomo Rubber
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between GRUPO and Sumitomo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GRUPO CARSO A1 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 GRUPO CARSO-A1 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 GRUPO CARSO A1 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 GRUPO CARSO-A1 i.e., GRUPO CARSO-A1 and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between GRUPO CARSO-A1 and Sumitomo Rubber
Assuming the 90 days trading horizon GRUPO CARSO A1 is expected to generate 1.64 times more return on investment than Sumitomo Rubber. However, GRUPO CARSO-A1 is 1.64 times more volatile than Sumitomo Rubber Industries. It trades about 0.03 of its potential returns per unit of risk. Sumitomo Rubber Industries is currently generating about 0.01 per unit of risk. If you would invest 486.00 in GRUPO CARSO A1 on September 4, 2024 and sell it today you would earn a total of 79.00 from holding GRUPO CARSO A1 or generate 16.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRUPO CARSO A1 vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| GRUPO CARSO A1 |
| Sumitomo Rubber Indu |
GRUPO CARSO-A1 and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRUPO CARSO-A1 and Sumitomo Rubber
The main advantage of trading using opposite GRUPO CARSO-A1 and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRUPO CARSO-A1 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.| GRUPO CARSO-A1 vs. TOTAL GABON | GRUPO CARSO-A1 vs. Walgreens Boots Alliance | GRUPO CARSO-A1 vs. Peak Resources Limited |
| Sumitomo Rubber vs. Zeon Corporation | Sumitomo Rubber vs. Essentra plc | 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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