Correlation Between PUBLIC STORAGE and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both PUBLIC STORAGE 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 PUBLIC STORAGE and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PUBLIC STORAGE PRFO and Sumitomo Rubber Industries, you can compare the effects of market volatilities on PUBLIC STORAGE 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 PUBLIC STORAGE with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUBLIC STORAGE and Sumitomo Rubber.
Diversification Opportunities for PUBLIC STORAGE and Sumitomo Rubber
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PUBLIC and Sumitomo is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding PUBLIC STORAGE PRFO 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 PUBLIC STORAGE 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 PUBLIC STORAGE PRFO 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 PUBLIC STORAGE i.e., PUBLIC STORAGE and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between PUBLIC STORAGE and Sumitomo Rubber
Assuming the 90 days trading horizon PUBLIC STORAGE PRFO is expected to under-perform the Sumitomo Rubber. But the stock apears to be less risky and, when comparing its historical volatility, PUBLIC STORAGE PRFO is 1.42 times less risky than Sumitomo Rubber. The stock trades about -0.11 of its potential returns per unit of risk. The Sumitomo Rubber Industries is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 890.00 in Sumitomo Rubber Industries on August 25, 2024 and sell it today you would earn a total of 160.00 from holding Sumitomo Rubber Industries or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PUBLIC STORAGE PRFO vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| PUBLIC STORAGE PRFO |
| Sumitomo Rubber Indu |
PUBLIC STORAGE and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PUBLIC STORAGE and Sumitomo Rubber
The main advantage of trading using opposite PUBLIC STORAGE and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUBLIC STORAGE 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.| PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Superior Plus Corp |
| Sumitomo Rubber vs. Bridgestone | Sumitomo Rubber vs. Advanced Drainage Systems | Sumitomo Rubber vs. Zeon Corporation | Sumitomo Rubber vs. Polyplex Public |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |