Correlation Between Sims Metal and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Sims Metal and Amkor Technology 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 Amkor Technology 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 Amkor Technology, you can compare the effects of market volatilities on Sims Metal and Amkor Technology 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 Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and Amkor Technology.
Diversification Opportunities for Sims Metal and Amkor Technology
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sims and Amkor is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology 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 Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of Sims Metal i.e., Sims Metal and Amkor Technology go up and down completely randomly.
Pair Corralation between Sims Metal and Amkor Technology
Assuming the 90 days horizon Sims Metal Management is expected to generate 0.71 times more return on investment than Amkor Technology. However, Sims Metal Management is 1.4 times less risky than Amkor Technology. It trades about 0.0 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.01 per unit of risk. If you would invest 847.00 in Sims Metal Management on November 8, 2024 and sell it today you would lose (52.00) from holding Sims Metal Management or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sims Metal Management vs. Amkor Technology
Performance |
| Timeline |
| Sims Metal Management |
| Amkor Technology |
Sims Metal and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims Metal and Amkor Technology
The main advantage of trading using opposite Sims Metal and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, Amkor Technology 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 Amkor Technology will offset losses from the drop in Amkor Technology's long position.| Sims Metal vs. De Grey Mining | Sims Metal vs. Pentair plc | Sims Metal vs. NORWEGIAN AIR SHUT | Sims Metal vs. Calibre Mining Corp |
| Amkor Technology vs. CompuGroup Medical SE | Amkor Technology vs. Japan Medical Dynamic | Amkor Technology vs. PEPTONIC MEDICAL | Amkor Technology vs. UNIVMUSIC GRPADR050 |
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.
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