Correlation Between SIMS METAL and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both SIMS METAL and ARDAGH 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 SIMS METAL and ARDAGH METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIMS METAL MGT and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on SIMS METAL and ARDAGH 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 SIMS METAL with a short position of ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMS METAL and ARDAGH METAL.
Diversification Opportunities for SIMS METAL and ARDAGH METAL
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SIMS and ARDAGH is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SIMS METAL MGT and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL and SIMS METAL 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 SIMS METAL MGT are associated (or correlated) with ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of SIMS METAL i.e., SIMS METAL and ARDAGH METAL go up and down completely randomly.
Pair Corralation between SIMS METAL and ARDAGH METAL
Assuming the 90 days trading horizon SIMS METAL is expected to generate 2.13 times less return on investment than ARDAGH METAL. But when comparing it to its historical volatility, SIMS METAL MGT is 1.8 times less risky than ARDAGH METAL. It trades about 0.0 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 432.00 in ARDAGH METAL PACDL 0001 on August 31, 2024 and sell it today you would lose (90.00) from holding ARDAGH METAL PACDL 0001 or give up 20.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMS METAL MGT vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| SIMS METAL MGT |
| ARDAGH METAL PACDL |
SIMS METAL and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMS METAL and ARDAGH METAL
The main advantage of trading using opposite SIMS METAL and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMS METAL position performs unexpectedly, ARDAGH 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| SIMS METAL vs. SENECA FOODS A | SIMS METAL vs. Zijin Mining Group | SIMS METAL vs. LION ONE METALS | SIMS METAL vs. CAL MAINE FOODS |
| ARDAGH METAL vs. KAUFMAN ET BROAD | ARDAGH METAL vs. GRIFFIN MINING LTD | ARDAGH METAL vs. Nishi Nippon Railroad Co | ARDAGH METAL vs. EVS Broadcast Equipment |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |