Correlation Between Sims Metal and INTERSHOP Communications
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By analyzing existing cross correlation between Sims Metal Management and INTERSHOP Communications Aktiengesellschaft, you can compare the effects of market volatilities on Sims Metal and INTERSHOP Communications 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 INTERSHOP Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and INTERSHOP Communications.
Diversification Opportunities for Sims Metal and INTERSHOP Communications
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sims and INTERSHOP is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and INTERSHOP Communications Aktie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERSHOP Communications 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 INTERSHOP Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERSHOP Communications has no effect on the direction of Sims Metal i.e., Sims Metal and INTERSHOP Communications go up and down completely randomly.
Pair Corralation between Sims Metal and INTERSHOP Communications
Assuming the 90 days horizon Sims Metal Management is expected to generate 1.83 times more return on investment than INTERSHOP Communications. However, Sims Metal is 1.83 times more volatile than INTERSHOP Communications Aktiengesellschaft. It trades about 0.12 of its potential returns per unit of risk. INTERSHOP Communications Aktiengesellschaft is currently generating about -0.25 per unit of risk. If you would invest 755.00 in Sims Metal Management on September 2, 2024 and sell it today you would earn a total of 45.00 from holding Sims Metal Management or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sims Metal Management vs. INTERSHOP Communications Aktie
Performance |
| Timeline |
| Sims Metal Management |
| INTERSHOP Communications |
Sims Metal and INTERSHOP Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims Metal and INTERSHOP Communications
The main advantage of trading using opposite Sims Metal and INTERSHOP Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, INTERSHOP Communications 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 INTERSHOP Communications will offset losses from the drop in INTERSHOP Communications' long position.The idea behind Sims Metal Management and INTERSHOP Communications Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| INTERSHOP Communications vs. GRIFFIN MINING LTD | INTERSHOP Communications vs. UMC Electronics Co | INTERSHOP Communications vs. MCEWEN MINING INC | INTERSHOP Communications vs. ELECTRONIC ARTS |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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