Correlation Between Brockhaus Capital and Sims Metal
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital 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 Brockhaus Capital and Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Sims Metal Management, you can compare the effects of market volatilities on Brockhaus Capital 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 Brockhaus Capital with a short position of Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Sims Metal.
Diversification Opportunities for Brockhaus Capital and Sims Metal
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brockhaus and Sims is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital 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 Brockhaus Capital 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 Brockhaus Capital 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 Brockhaus Capital i.e., Brockhaus Capital and Sims Metal go up and down completely randomly.
Pair Corralation between Brockhaus Capital and Sims Metal
Assuming the 90 days trading horizon Brockhaus Capital Management is expected to under-perform the Sims Metal. But the stock apears to be less risky and, when comparing its historical volatility, Brockhaus Capital Management is 1.16 times less risky than Sims Metal. The stock trades about -0.34 of its potential returns per unit of risk. The Sims Metal Management is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 765.00 in Sims Metal Management on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Sims Metal Management or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brockhaus Capital Management vs. Sims Metal Management
Performance |
| Timeline |
| Brockhaus Capital |
| Sims Metal Management |
Brockhaus Capital and Sims Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and Sims Metal
The main advantage of trading using opposite Brockhaus Capital and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital 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.| Brockhaus Capital vs. Vishay Intertechnology | Brockhaus Capital vs. Amkor Technology | Brockhaus Capital vs. Micron Technology | Brockhaus Capital vs. DXC Technology Co |
| Sims Metal vs. ArcelorMittal | Sims Metal vs. Steel Dynamics | Sims Metal vs. NIPPON STEEL SPADR | Sims Metal vs. POSCO Holdings |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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