Correlation Between Sims Metal and Konica Minolta
Can any of the company-specific risk be diversified away by investing in both Sims Metal and Konica Minolta 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 Konica Minolta 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 Konica Minolta, you can compare the effects of market volatilities on Sims Metal and Konica Minolta 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 Konica Minolta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and Konica Minolta.
Diversification Opportunities for Sims Metal and Konica Minolta
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sims and Konica is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and Konica Minolta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konica Minolta 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 Konica Minolta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konica Minolta has no effect on the direction of Sims Metal i.e., Sims Metal and Konica Minolta go up and down completely randomly.
Pair Corralation between Sims Metal and Konica Minolta
Assuming the 90 days horizon Sims Metal Management is expected to generate 0.64 times more return on investment than Konica Minolta. However, Sims Metal Management is 1.57 times less risky than Konica Minolta. It trades about 0.25 of its potential returns per unit of risk. Konica Minolta is currently generating about -0.28 per unit of risk. If you would invest 800.00 in Sims Metal Management on December 4, 2024 and sell it today you would earn a total of 50.00 from holding Sims Metal Management or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sims Metal Management vs. Konica Minolta
Performance |
| Timeline |
| Sims Metal Management |
| Konica Minolta |
Sims Metal and Konica Minolta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims Metal and Konica Minolta
The main advantage of trading using opposite Sims Metal and Konica Minolta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, Konica Minolta 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 Konica Minolta will offset losses from the drop in Konica Minolta's long position.| Sims Metal vs. Lippo Malls Indonesia | Sims Metal vs. H2O Retailing | Sims Metal vs. Tradeweb Markets | Sims Metal vs. Platinum Investment Management |
| Konica Minolta vs. FUJIFILM Holdings | Konica Minolta vs. Avery Dennison Corp | Konica Minolta vs. KOKUYO LTD |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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