Correlation Between Sims Metal and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both Sims Metal and Chengdu PUTIAN 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 Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on Sims Metal and Chengdu PUTIAN 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 Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and Chengdu PUTIAN.
Diversification Opportunities for Sims Metal and Chengdu PUTIAN
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sims and Chengdu is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec 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 Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of Sims Metal i.e., Sims Metal and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between Sims Metal and Chengdu PUTIAN
Assuming the 90 days horizon Sims Metal Management is expected to generate 0.53 times more return on investment than Chengdu PUTIAN. However, Sims Metal Management is 1.88 times less risky than Chengdu PUTIAN. It trades about 0.04 of its potential returns per unit of risk. Chengdu PUTIAN Telecommunications is currently generating about 0.01 per unit of risk. If you would invest 765.00 in Sims Metal Management on November 2, 2024 and sell it today you would earn a total of 30.00 from holding Sims Metal Management or generate 3.92% 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. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| Sims Metal Management |
| Chengdu PUTIAN Telec |
Sims Metal and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims Metal and Chengdu PUTIAN
The main advantage of trading using opposite Sims Metal and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN's long position.| Sims Metal vs. Global Ship Lease | Sims Metal vs. Xenia Hotels Resorts | Sims Metal vs. DALATA HOTEL | Sims Metal vs. WILLIS LEASE FIN |
| Chengdu PUTIAN vs. PICKN PAY STORES | Chengdu PUTIAN vs. Tyson Foods | Chengdu PUTIAN vs. PATTIES FOODS | Chengdu PUTIAN vs. BURLINGTON STORES |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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