Correlation Between Sims Metal and Chuangs China
Can any of the company-specific risk be diversified away by investing in both Sims Metal and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on Sims Metal and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and Chuangs China.
Diversification Opportunities for Sims Metal and Chuangs China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sims and Chuangs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of Sims Metal i.e., Sims Metal and Chuangs China go up and down completely randomly.
Pair Corralation between Sims Metal and Chuangs China
If you would invest 800.00 in Sims Metal Management on November 29, 2024 and sell it today you would earn a total of 35.00 from holding Sims Metal Management or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sims Metal Management vs. Chuangs China Investments
Performance |
| Timeline |
| Sims Metal Management |
| Chuangs China Investments |
Sims Metal and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims Metal and Chuangs China
The main advantage of trading using opposite Sims Metal and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| Sims Metal vs. Data Modul AG | Sims Metal vs. Information Services International Dentsu | Sims Metal vs. Linedata Services SA | Sims Metal vs. Algonquin Power Utilities |
| Chuangs China vs. Vulcan Materials | Chuangs China vs. COPLAND ROAD CAPITAL | Chuangs China vs. SAFEROADS HLDGS | Chuangs China vs. Hyster Yale Materials Handling |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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