Correlation Between Vivendi SE and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both Vivendi SE 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 Vivendi SE and Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vivendi SE and Sumitomo Rubber Industries, you can compare the effects of market volatilities on Vivendi SE 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 Vivendi SE with a short position of Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vivendi SE and Sumitomo Rubber.
Diversification Opportunities for Vivendi SE and Sumitomo Rubber
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vivendi and Sumitomo is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Vivendi SE 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 Vivendi SE 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 Vivendi SE 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 Vivendi SE i.e., Vivendi SE and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between Vivendi SE and Sumitomo Rubber
Assuming the 90 days horizon Vivendi SE is expected to under-perform the Sumitomo Rubber. But the stock apears to be less risky and, when comparing its historical volatility, Vivendi SE is 1.28 times less risky than Sumitomo Rubber. The stock trades about -0.32 of its potential returns per unit of risk. The Sumitomo Rubber Industries is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 890.00 in Sumitomo Rubber Industries on September 4, 2024 and sell it today you would earn a total of 120.00 from holding Sumitomo Rubber Industries or generate 13.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vivendi SE vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| Vivendi SE |
| Sumitomo Rubber Indu |
Vivendi SE and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vivendi SE and Sumitomo Rubber
The main advantage of trading using opposite Vivendi SE and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vivendi SE 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.| Vivendi SE vs. TITAN MACHINERY | Vivendi SE vs. TITANIUM TRANSPORTGROUP | Vivendi SE vs. Transport International Holdings | Vivendi SE vs. NTG Nordic Transport |
| Sumitomo Rubber vs. Zeon Corporation | Sumitomo Rubber vs. Essentra plc | Sumitomo Rubber vs. Semperit Aktiengesellschaft Holding | Sumitomo Rubber vs. PT Gajah Tunggal |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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