Correlation Between LANDSEA GREEN and Sims Metal
Can any of the company-specific risk be diversified away by investing in both LANDSEA GREEN 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 LANDSEA GREEN and Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LANDSEA GREEN MANAGEMENT and Sims Metal Management, you can compare the effects of market volatilities on LANDSEA GREEN 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 LANDSEA GREEN with a short position of Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of LANDSEA GREEN and Sims Metal.
Diversification Opportunities for LANDSEA GREEN and Sims Metal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LANDSEA and Sims is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LANDSEA GREEN MANAGEMENT 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 LANDSEA GREEN 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 LANDSEA GREEN MANAGEMENT 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 LANDSEA GREEN i.e., LANDSEA GREEN and Sims Metal go up and down completely randomly.
Pair Corralation between LANDSEA GREEN and Sims Metal
Assuming the 90 days horizon LANDSEA GREEN MANAGEMENT is expected to generate 34.38 times more return on investment than Sims Metal. However, LANDSEA GREEN is 34.38 times more volatile than Sims Metal Management. It trades about 0.07 of its potential returns per unit of risk. Sims Metal Management is currently generating about 0.01 per unit of risk. If you would invest 1.30 in LANDSEA GREEN MANAGEMENT on September 16, 2024 and sell it today you would lose (1.20) from holding LANDSEA GREEN MANAGEMENT or give up 92.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LANDSEA GREEN MANAGEMENT vs. Sims Metal Management
Performance |
| Timeline |
| LANDSEA GREEN MANAGEMENT |
| Sims Metal Management |
LANDSEA GREEN and Sims Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LANDSEA GREEN and Sims Metal
The main advantage of trading using opposite LANDSEA GREEN and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANDSEA GREEN 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.| LANDSEA GREEN vs. Superior Plus Corp | LANDSEA GREEN vs. NMI Holdings | LANDSEA GREEN vs. SIVERS SEMICONDUCTORS AB | LANDSEA GREEN vs. NorAm Drilling AS |
| Sims Metal vs. BW OFFSHORE LTD | Sims Metal vs. Axcelis Technologies | Sims Metal vs. Uber Technologies | Sims Metal vs. THORNEY TECHS LTD |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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