Correlation Between SIMS METAL and Bet-at-home
Can any of the company-specific risk be diversified away by investing in both SIMS METAL and Bet-at-home 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 Bet-at-home 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 bet at home AG, you can compare the effects of market volatilities on SIMS METAL and Bet-at-home 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 Bet-at-home. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMS METAL and Bet-at-home.
Diversification Opportunities for SIMS METAL and Bet-at-home
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIMS and Bet-at-home is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SIMS METAL MGT and bet at home AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on bet at home 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 Bet-at-home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of bet at home has no effect on the direction of SIMS METAL i.e., SIMS METAL and Bet-at-home go up and down completely randomly.
Pair Corralation between SIMS METAL and Bet-at-home
Assuming the 90 days trading horizon SIMS METAL MGT is expected to generate 0.7 times more return on investment than Bet-at-home. However, SIMS METAL MGT is 1.43 times less risky than Bet-at-home. It trades about 0.0 of its potential returns per unit of risk. bet at home AG is currently generating about -0.03 per unit of risk. If you would invest 899.00 in SIMS METAL MGT on August 31, 2024 and sell it today you would lose (89.00) from holding SIMS METAL MGT or give up 9.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMS METAL MGT vs. bet at home AG
Performance |
| Timeline |
| SIMS METAL MGT |
| bet at home |
SIMS METAL and Bet-at-home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMS METAL and Bet-at-home
The main advantage of trading using opposite SIMS METAL and Bet-at-home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMS METAL position performs unexpectedly, Bet-at-home 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 Bet-at-home will offset losses from the drop in Bet-at-home'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 |
| Bet-at-home vs. Austevoll Seafood ASA | Bet-at-home vs. CHINA TONTINE WINES | Bet-at-home vs. SIMS METAL MGT | Bet-at-home vs. Aluminum of |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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