Correlation Between Semperit Aktiengesellscha and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both Semperit Aktiengesellscha 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 Semperit Aktiengesellscha and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semperit Aktiengesellschaft Holding and Sumitomo Rubber Industries, you can compare the effects of market volatilities on Semperit Aktiengesellscha 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 Semperit Aktiengesellscha with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semperit Aktiengesellscha and Sumitomo Rubber.
Diversification Opportunities for Semperit Aktiengesellscha and Sumitomo Rubber
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Semperit and Sumitomo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Semperit Aktiengesellschaft Ho 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 Semperit Aktiengesellscha 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 Semperit Aktiengesellschaft Holding 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 Semperit Aktiengesellscha i.e., Semperit Aktiengesellscha and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between Semperit Aktiengesellscha and Sumitomo Rubber
Assuming the 90 days horizon Semperit Aktiengesellschaft Holding is expected to under-perform the Sumitomo Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Semperit Aktiengesellschaft Holding is 1.3 times less risky than Sumitomo Rubber. The stock trades about 0.0 of its potential returns per unit of risk. The Sumitomo Rubber Industries is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 910.00 in Sumitomo Rubber Industries on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Sumitomo Rubber Industries or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Semperit Aktiengesellschaft Ho vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| Semperit Aktiengesellscha |
| Sumitomo Rubber Indu |
Semperit Aktiengesellscha and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semperit Aktiengesellscha and Sumitomo Rubber
The main advantage of trading using opposite Semperit Aktiengesellscha and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semperit Aktiengesellscha 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.| Semperit Aktiengesellscha vs. Bridgestone | Semperit Aktiengesellscha vs. The Goodyear Tire | Semperit Aktiengesellscha vs. Sumitomo Rubber Industries | Semperit Aktiengesellscha vs. Zeon Corporation |
| Sumitomo Rubber vs. SEKISUI CHEMICAL | Sumitomo Rubber vs. Sanyo Chemical Industries | Sumitomo Rubber vs. WESTLAKE CHEMICAL | Sumitomo Rubber vs. Lendlease Group |
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