Correlation Between TSOGO SUN and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both TSOGO SUN 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 TSOGO SUN and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TSOGO SUN GAMING and Sumitomo Rubber Industries, you can compare the effects of market volatilities on TSOGO SUN 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 TSOGO SUN with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of TSOGO SUN and Sumitomo Rubber.
Diversification Opportunities for TSOGO SUN and Sumitomo Rubber
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between TSOGO and Sumitomo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding TSOGO SUN GAMING 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 TSOGO SUN 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 TSOGO SUN GAMING 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 TSOGO SUN i.e., TSOGO SUN and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between TSOGO SUN and Sumitomo Rubber
Assuming the 90 days horizon TSOGO SUN GAMING is expected to generate 0.95 times more return on investment than Sumitomo Rubber. However, TSOGO SUN GAMING is 1.05 times less risky than Sumitomo Rubber. It trades about 0.06 of its potential returns per unit of risk. Sumitomo Rubber Industries is currently generating about 0.05 per unit of risk. If you would invest 18.00 in TSOGO SUN GAMING on August 29, 2024 and sell it today you would earn a total of 42.00 from holding TSOGO SUN GAMING or generate 233.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TSOGO SUN GAMING vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| TSOGO SUN GAMING |
| Sumitomo Rubber Indu |
TSOGO SUN and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TSOGO SUN and Sumitomo Rubber
The main advantage of trading using opposite TSOGO SUN and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TSOGO SUN 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.| TSOGO SUN vs. Perseus Mining Limited | TSOGO SUN vs. Evolution Mining Limited | TSOGO SUN vs. COSMOSTEEL HLDGS | TSOGO SUN vs. RELIANCE STEEL AL |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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