Correlation Between Beijing Media and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both Beijing Media 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 Beijing Media and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and Sumitomo Rubber Industries, you can compare the effects of market volatilities on Beijing Media 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 Beijing Media with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Media and Sumitomo Rubber.
Diversification Opportunities for Beijing Media and Sumitomo Rubber
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Beijing and Sumitomo is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media 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 Beijing Media 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 Beijing Media 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 Beijing Media i.e., Beijing Media and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between Beijing Media and Sumitomo Rubber
Assuming the 90 days horizon Beijing Media is expected to generate 13.31 times less return on investment than Sumitomo Rubber. In addition to that, Beijing Media is 2.36 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 0.3 per unit of volatility. If you would invest 890.00 in Sumitomo Rubber Industries on September 5, 2024 and sell it today you would earn a total of 130.00 from holding Sumitomo Rubber Industries or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Beijing Media vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| Beijing Media |
| Sumitomo Rubber Indu |
Beijing Media and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Media and Sumitomo Rubber
The main advantage of trading using opposite Beijing Media and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Media 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.| Beijing Media vs. GigaMedia | Beijing Media vs. BURLINGTON STORES | Beijing Media vs. OURGAME INTHOLDL 00005 | Beijing Media vs. MARKET VECTR RETAIL |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |