Correlation Between Global Industrial and Sims Metal
Can any of the company-specific risk be diversified away by investing in both Global Industrial 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 Global Industrial and Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Industrial Co and Sims Metal Management, you can compare the effects of market volatilities on Global Industrial 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 Global Industrial with a short position of Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Industrial and Sims Metal.
Diversification Opportunities for Global Industrial and Sims Metal
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Sims is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global Industrial Co 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 Global Industrial 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 Global Industrial Co 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 Global Industrial i.e., Global Industrial and Sims Metal go up and down completely randomly.
Pair Corralation between Global Industrial and Sims Metal
If you would invest 2,629 in Global Industrial Co on September 4, 2024 and sell it today you would earn a total of 149.00 from holding Global Industrial Co or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Global Industrial Co vs. Sims Metal Management
Performance |
| Timeline |
| Global Industrial |
| Sims Metal Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global Industrial and Sims Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Industrial and Sims Metal
The main advantage of trading using opposite Global Industrial and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Industrial 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.| Global Industrial vs. Distribution Solutions Group | Global Industrial vs. Core Main | Global Industrial vs. Applied Industrial Technologies | Global Industrial vs. BlueLinx Holdings |
| Sims Metal vs. Steel Dynamics | Sims Metal vs. Cleveland Cliffs | Sims Metal vs. United States Steel | Sims Metal vs. ArcelorMittal SA ADR |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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