Correlation Between Sims Metal and YASKAWA ELEC
Can any of the company-specific risk be diversified away by investing in both Sims Metal and YASKAWA ELEC 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 YASKAWA ELEC 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 YASKAWA ELEC UNSP, you can compare the effects of market volatilities on Sims Metal and YASKAWA ELEC 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 YASKAWA ELEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and YASKAWA ELEC.
Diversification Opportunities for Sims Metal and YASKAWA ELEC
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sims and YASKAWA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and YASKAWA ELEC UNSP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YASKAWA ELEC UNSP 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 YASKAWA ELEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YASKAWA ELEC UNSP has no effect on the direction of Sims Metal i.e., Sims Metal and YASKAWA ELEC go up and down completely randomly.
Pair Corralation between Sims Metal and YASKAWA ELEC
If you would invest 700.00 in Sims Metal Management on October 24, 2024 and sell it today you would earn a total of 100.00 from holding Sims Metal Management or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Sims Metal Management vs. YASKAWA ELEC UNSP
Performance |
| Timeline |
| Sims Metal Management |
| YASKAWA ELEC UNSP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Sims Metal and YASKAWA ELEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims Metal and YASKAWA ELEC
The main advantage of trading using opposite Sims Metal and YASKAWA ELEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, YASKAWA ELEC 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 YASKAWA ELEC will offset losses from the drop in YASKAWA ELEC's long position.| Sims Metal vs. T Mobile | Sims Metal vs. G III Apparel Group | Sims Metal vs. Ribbon Communications | Sims Metal vs. Urban Outfitters |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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