Correlation Between PT Bank and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Maybank and Sumitomo Rubber Industries, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Sumitomo Rubber.
Diversification Opportunities for PT Bank and Sumitomo Rubber
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOZA and Sumitomo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank 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 PT Bank 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 PT Bank Maybank 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 PT Bank i.e., PT Bank and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between PT Bank and Sumitomo Rubber
Assuming the 90 days trading horizon PT Bank is expected to generate 2.28 times less return on investment than Sumitomo Rubber. In addition to that, PT Bank is 2.04 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 0.04 per unit of volatility. If you would invest 865.00 in Sumitomo Rubber Industries on September 12, 2024 and sell it today you would earn a total of 185.00 from holding Sumitomo Rubber Industries or generate 21.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Maybank vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| PT Bank Maybank |
| Sumitomo Rubber Indu |
PT Bank and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Sumitomo Rubber
The main advantage of trading using opposite PT Bank and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. China Merchants Bank | PT Bank vs. HDFC Bank Limited | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central |
| Sumitomo Rubber vs. Superior Plus Corp | Sumitomo Rubber vs. NMI Holdings | Sumitomo Rubber vs. SIVERS SEMICONDUCTORS AB | Sumitomo Rubber vs. NorAm Drilling AS |
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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