Correlation Between SCANDMEDICAL SOLDK-040 and Sims Metal
Can any of the company-specific risk be diversified away by investing in both SCANDMEDICAL SOLDK-040 and Sims Metal 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 SCANDMEDICAL SOLDK-040 and Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCANDMEDICAL SOLDK 040 and Sims Metal Management, you can compare the effects of market volatilities on SCANDMEDICAL SOLDK-040 and Sims Metal 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 SCANDMEDICAL SOLDK-040 with a short position of Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCANDMEDICAL SOLDK-040 and Sims Metal.
Diversification Opportunities for SCANDMEDICAL SOLDK-040 and Sims Metal
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCANDMEDICAL and Sims is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding SCANDMEDICAL SOLDK 040 and Sims Metal Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims Metal Management and SCANDMEDICAL SOLDK-040 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 SCANDMEDICAL SOLDK 040 are associated (or correlated) with Sims Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims Metal Management has no effect on the direction of SCANDMEDICAL SOLDK-040 i.e., SCANDMEDICAL SOLDK-040 and Sims Metal go up and down completely randomly.
Pair Corralation between SCANDMEDICAL SOLDK-040 and Sims Metal
Assuming the 90 days horizon SCANDMEDICAL SOLDK-040 is expected to generate 2.25 times less return on investment than Sims Metal. In addition to that, SCANDMEDICAL SOLDK-040 is 1.62 times more volatile than Sims Metal Management. It trades about 0.03 of its total potential returns per unit of risk. Sims Metal Management is currently generating about 0.12 per unit of volatility. 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCANDMEDICAL SOLDK 040 vs. Sims Metal Management
Performance |
| Timeline |
| SCANDMEDICAL SOLDK 040 |
| Sims Metal Management |
SCANDMEDICAL SOLDK-040 and Sims Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCANDMEDICAL SOLDK-040 and Sims Metal
The main advantage of trading using opposite SCANDMEDICAL SOLDK-040 and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCANDMEDICAL SOLDK-040 position performs unexpectedly, Sims Metal 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 Sims Metal will offset losses from the drop in Sims Metal's long position.| SCANDMEDICAL SOLDK-040 vs. MGIC INVESTMENT | SCANDMEDICAL SOLDK-040 vs. SLR Investment Corp | SCANDMEDICAL SOLDK-040 vs. Chuangs China Investments | SCANDMEDICAL SOLDK-040 vs. New Residential Investment |
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
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |