Correlation Between Sims Metal and Fukuoka Financial
Can any of the company-specific risk be diversified away by investing in both Sims Metal and Fukuoka Financial 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 Fukuoka Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sims Metal Management and Fukuoka Financial Group, you can compare the effects of market volatilities on Sims Metal and Fukuoka Financial 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 Fukuoka Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and Fukuoka Financial.
Diversification Opportunities for Sims Metal and Fukuoka Financial
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sims and Fukuoka is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and Fukuoka Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuoka Financial 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 Management are associated (or correlated) with Fukuoka Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuoka Financial has no effect on the direction of Sims Metal i.e., Sims Metal and Fukuoka Financial go up and down completely randomly.
Pair Corralation between Sims Metal and Fukuoka Financial
Assuming the 90 days horizon Sims Metal Management is expected to under-perform the Fukuoka Financial. In addition to that, Sims Metal is 1.31 times more volatile than Fukuoka Financial Group. It trades about -0.03 of its total potential returns per unit of risk. Fukuoka Financial Group is currently generating about 0.3 per unit of volatility. If you would invest 2,380 in Fukuoka Financial Group on September 13, 2024 and sell it today you would earn a total of 260.00 from holding Fukuoka Financial Group or generate 10.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sims Metal Management vs. Fukuoka Financial Group
Performance |
| Timeline |
| Sims Metal Management |
| Fukuoka Financial |
Sims Metal and Fukuoka Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims Metal and Fukuoka Financial
The main advantage of trading using opposite Sims Metal and Fukuoka Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, Fukuoka Financial 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 Fukuoka Financial will offset losses from the drop in Fukuoka Financial's long position.| Sims Metal vs. ArcelorMittal | Sims Metal vs. NIPPON STEEL SPADR | Sims Metal vs. Reliance Steel Aluminum | Sims Metal vs. Superior Plus Corp |
| Fukuoka Financial vs. VIRGIN WINES UK | Fukuoka Financial vs. Jacquet Metal Service | Fukuoka Financial vs. Marie Brizard Wine | Fukuoka Financial vs. GungHo Online Entertainment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |