Correlation Between NEWELL RUBBERMAID and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both NEWELL RUBBERMAID and Sumitomo Mitsui 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 NEWELL RUBBERMAID and Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NEWELL RUBBERMAID and Sumitomo Mitsui Construction, you can compare the effects of market volatilities on NEWELL RUBBERMAID and Sumitomo Mitsui 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 NEWELL RUBBERMAID with a short position of Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWELL RUBBERMAID and Sumitomo Mitsui.
Diversification Opportunities for NEWELL RUBBERMAID and Sumitomo Mitsui
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEWELL and Sumitomo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NEWELL RUBBERMAID and Sumitomo Mitsui Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Cons and NEWELL RUBBERMAID 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 NEWELL RUBBERMAID are associated (or correlated) with Sumitomo Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Cons has no effect on the direction of NEWELL RUBBERMAID i.e., NEWELL RUBBERMAID and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between NEWELL RUBBERMAID and Sumitomo Mitsui
Assuming the 90 days trading horizon NEWELL RUBBERMAID is expected to generate 0.68 times more return on investment than Sumitomo Mitsui. However, NEWELL RUBBERMAID is 1.47 times less risky than Sumitomo Mitsui. It trades about 0.09 of its potential returns per unit of risk. Sumitomo Mitsui Construction is currently generating about 0.01 per unit of risk. If you would invest 956.00 in NEWELL RUBBERMAID on October 24, 2024 and sell it today you would earn a total of 15.00 from holding NEWELL RUBBERMAID or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWELL RUBBERMAID vs. Sumitomo Mitsui Construction
Performance |
| Timeline |
| NEWELL RUBBERMAID |
| Sumitomo Mitsui Cons |
NEWELL RUBBERMAID and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWELL RUBBERMAID and Sumitomo Mitsui
The main advantage of trading using opposite NEWELL RUBBERMAID and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWELL RUBBERMAID position performs unexpectedly, Sumitomo Mitsui 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 Mitsui will offset losses from the drop in Sumitomo Mitsui's long position.| NEWELL RUBBERMAID vs. SQUIRREL MEDIA SA | NEWELL RUBBERMAID vs. Mitsubishi Gas Chemical | NEWELL RUBBERMAID vs. X FAB Silicon Foundries | NEWELL RUBBERMAID vs. CNVISION MEDIA |
| Sumitomo Mitsui vs. Heidelberg Materials AG | Sumitomo Mitsui vs. SEI INVESTMENTS | Sumitomo Mitsui vs. CHRYSALIS INVESTMENTS LTD | Sumitomo Mitsui vs. Vulcan Materials |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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