Correlation Between CELLULAR GOODS and Sims Metal
Can any of the company-specific risk be diversified away by investing in both CELLULAR GOODS and Sims Metal 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 CELLULAR GOODS and Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CELLULAR GOODS LS and Sims Metal Management, you can compare the effects of market volatilities on CELLULAR GOODS and Sims Metal 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 CELLULAR GOODS with a short position of Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CELLULAR GOODS and Sims Metal.
Diversification Opportunities for CELLULAR GOODS and Sims Metal
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CELLULAR and Sims is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CELLULAR GOODS LS and Sims Metal Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims Metal Management and CELLULAR GOODS 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 CELLULAR GOODS LS are associated (or correlated) with Sims Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims Metal Management has no effect on the direction of CELLULAR GOODS i.e., CELLULAR GOODS and Sims Metal go up and down completely randomly.
Pair Corralation between CELLULAR GOODS and Sims Metal
Assuming the 90 days horizon CELLULAR GOODS LS is expected to generate 35.73 times more return on investment than Sims Metal. However, CELLULAR GOODS is 35.73 times more volatile than Sims Metal Management. It trades about 0.23 of its potential returns per unit of risk. Sims Metal Management is currently generating about 0.2 per unit of risk. If you would invest 0.10 in CELLULAR GOODS LS on November 5, 2024 and sell it today you would earn a total of 0.20 from holding CELLULAR GOODS LS or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CELLULAR GOODS LS vs. Sims Metal Management
Performance |
| Timeline |
| CELLULAR GOODS LS |
| Sims Metal Management |
CELLULAR GOODS and Sims Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CELLULAR GOODS and Sims Metal
The main advantage of trading using opposite CELLULAR GOODS and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CELLULAR GOODS position performs unexpectedly, Sims Metal 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 Sims Metal will offset losses from the drop in Sims Metal's long position.| CELLULAR GOODS vs. Walgreens Boots Alliance | CELLULAR GOODS vs. ALIBHLINFTECUNSPADR | CELLULAR GOODS vs. Alibaba Health Information | CELLULAR GOODS vs. PetMed Express |
| Sims Metal vs. GOME Retail Holdings | Sims Metal vs. Caseys General Stores | Sims Metal vs. PLAYMATES TOYS | Sims Metal vs. FRACTAL GAMING GROUP |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |