Correlation Between Sims Metal and ULTRA CLEAN
Can any of the company-specific risk be diversified away by investing in both Sims Metal and ULTRA CLEAN 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 ULTRA CLEAN 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 ULTRA CLEAN HLDGS, you can compare the effects of market volatilities on Sims Metal and ULTRA CLEAN 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 ULTRA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and ULTRA CLEAN.
Diversification Opportunities for Sims Metal and ULTRA CLEAN
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sims and ULTRA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and ULTRA CLEAN HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ULTRA CLEAN HLDGS 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 ULTRA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ULTRA CLEAN HLDGS has no effect on the direction of Sims Metal i.e., Sims Metal and ULTRA CLEAN go up and down completely randomly.
Pair Corralation between Sims Metal and ULTRA CLEAN
Assuming the 90 days horizon Sims Metal is expected to generate 6.39 times less return on investment than ULTRA CLEAN. But when comparing it to its historical volatility, Sims Metal Management is 1.29 times less risky than ULTRA CLEAN. It trades about 0.0 of its potential returns per unit of risk. ULTRA CLEAN HLDGS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,087 in ULTRA CLEAN HLDGS on August 31, 2024 and sell it today you would earn a total of 473.00 from holding ULTRA CLEAN HLDGS or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sims Metal Management vs. ULTRA CLEAN HLDGS
Performance |
| Timeline |
| Sims Metal Management |
| ULTRA CLEAN HLDGS |
Sims Metal and ULTRA CLEAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims Metal and ULTRA CLEAN
The main advantage of trading using opposite Sims Metal and ULTRA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, ULTRA CLEAN 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 ULTRA CLEAN will offset losses from the drop in ULTRA CLEAN's long position.| Sims Metal vs. SALESFORCE INC CDR | Sims Metal vs. CARSALESCOM | Sims Metal vs. ADRIATIC METALS LS 013355 | Sims Metal vs. AAC TECHNOLOGHLDGADR |
| ULTRA CLEAN vs. SIVERS SEMICONDUCTORS AB | ULTRA CLEAN vs. Darden Restaurants | ULTRA CLEAN vs. Reliance Steel Aluminum | ULTRA CLEAN vs. Q2M Managementberatung AG |
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.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |