Correlation Between TRADEDOUBLER and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both TRADEDOUBLER 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 TRADEDOUBLER and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEDOUBLER AB SK and Sumitomo Rubber Industries, you can compare the effects of market volatilities on TRADEDOUBLER 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 TRADEDOUBLER with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEDOUBLER and Sumitomo Rubber.
Diversification Opportunities for TRADEDOUBLER and Sumitomo Rubber
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between TRADEDOUBLER and Sumitomo is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding TRADEDOUBLER AB SK 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 TRADEDOUBLER 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 TRADEDOUBLER AB SK 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 TRADEDOUBLER i.e., TRADEDOUBLER and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between TRADEDOUBLER and Sumitomo Rubber
Assuming the 90 days horizon TRADEDOUBLER AB SK is expected to under-perform the Sumitomo Rubber. In addition to that, TRADEDOUBLER is 2.17 times more volatile than Sumitomo Rubber Industries. It trades about -0.02 of its total potential returns per unit of risk. Sumitomo Rubber Industries is currently generating about 0.06 per unit of volatility. If you would invest 1,030 in Sumitomo Rubber Industries on October 29, 2024 and sell it today you would earn a total of 30.00 from holding Sumitomo Rubber Industries or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEDOUBLER AB SK vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| TRADEDOUBLER AB SK |
| Sumitomo Rubber Indu |
TRADEDOUBLER and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEDOUBLER and Sumitomo Rubber
The main advantage of trading using opposite TRADEDOUBLER and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEDOUBLER 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.| TRADEDOUBLER vs. SIDETRADE EO 1 | TRADEDOUBLER vs. Indutrade AB | TRADEDOUBLER vs. FLOW TRADERS LTD | TRADEDOUBLER vs. ETFS Coffee ETC |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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