Correlation Between Inoue Rubber and Rich Sport

Can any of the company-specific risk be diversified away by investing in both Inoue Rubber and Rich Sport 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 Inoue Rubber and Rich Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inoue Rubber Public and Rich Sport Public, you can compare the effects of market volatilities on Inoue Rubber and Rich Sport 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 Inoue Rubber with a short position of Rich Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inoue Rubber and Rich Sport.

Diversification Opportunities for Inoue Rubber and Rich Sport

0.34

Correlation Coefficient

Inoue Rubber  Rich Sport

Weak diversification

The 3 months correlation between Inoue and Rich is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Inoue Rubber Public and Rich Sport Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rich Sport Public and Inoue Rubber 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 Inoue Rubber Public are associated (or correlated) with Rich Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rich Sport Public has no effect on the direction of Inoue Rubber i.e., Inoue Rubber and Rich Sport go up and down completely randomly.

Pair Corralation between Inoue Rubber and Rich Sport

Assuming the 90 days trading horizon Inoue Rubber Public is expected to generate 0.57 times more return on investment than Rich Sport. However, Inoue Rubber Public is 1.74 times less risky than Rich Sport. It trades about -0.02 of its potential returns per unit of risk. Rich Sport Public is currently generating about -0.17 per unit of risk. If you would invest  1,140  in Inoue Rubber Public on April 23, 2025 and sell it today you would lose (20.00) from holding Inoue Rubber Public or give up 1.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Inoue Rubber Public  vs.  Rich Sport Public

Inoue Rubber Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inoue Rubber Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Inoue Rubber is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Rich Sport Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rich Sport Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Inoue Rubber and Rich Sport

The main advantage of trading using opposite Inoue Rubber and Rich Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inoue Rubber position performs unexpectedly, Rich Sport 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 Rich Sport will offset losses from the drop in Rich Sport's long position.

The idea behind Inoue Rubber Public and Rich Sport Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.