Correlation Between Bridgestone and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both Bridgestone and SANOK 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 Bridgestone and SANOK RUBBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bridgestone and SANOK RUBBER ZY, you can compare the effects of market volatilities on Bridgestone and SANOK 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 Bridgestone with a short position of SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridgestone and SANOK RUBBER.
Diversification Opportunities for Bridgestone and SANOK RUBBER
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bridgestone and SANOK is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bridgestone and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY and Bridgestone 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 Bridgestone are associated (or correlated) with SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of Bridgestone i.e., Bridgestone and SANOK RUBBER go up and down completely randomly.
Pair Corralation between Bridgestone and SANOK RUBBER
Assuming the 90 days trading horizon Bridgestone is expected to generate 1.89 times less return on investment than SANOK RUBBER. In addition to that, Bridgestone is 1.19 times more volatile than SANOK RUBBER ZY. It trades about 0.03 of its total potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.07 per unit of volatility. If you would invest 445.00 in SANOK RUBBER ZY on September 12, 2024 and sell it today you would earn a total of 6.00 from holding SANOK RUBBER ZY or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bridgestone vs. SANOK RUBBER ZY
Performance |
| Timeline |
| Bridgestone |
| SANOK RUBBER ZY |
Bridgestone and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bridgestone and SANOK RUBBER
The main advantage of trading using opposite Bridgestone and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bridgestone position performs unexpectedly, SANOK 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| Bridgestone vs. EAST SIDE GAMES | Bridgestone vs. GAMESTOP | Bridgestone vs. ANGLER GAMING PLC | Bridgestone vs. CAL MAINE FOODS |
| SANOK RUBBER vs. Bridgestone | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. SIVERS SEMICONDUCTORS AB | SANOK RUBBER vs. Norsk Hydro ASA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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