Correlation Between Gruppo Mutuionline and SIMS METAL
Can any of the company-specific risk be diversified away by investing in both Gruppo Mutuionline 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 Gruppo Mutuionline and SIMS METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gruppo Mutuionline SpA and SIMS METAL MGT, you can compare the effects of market volatilities on Gruppo Mutuionline 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 Gruppo Mutuionline with a short position of SIMS METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gruppo Mutuionline and SIMS METAL.
Diversification Opportunities for Gruppo Mutuionline and SIMS METAL
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gruppo and SIMS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gruppo Mutuionline SpA and SIMS METAL MGT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMS METAL MGT and Gruppo Mutuionline 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 Gruppo Mutuionline SpA 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 MGT has no effect on the direction of Gruppo Mutuionline i.e., Gruppo Mutuionline and SIMS METAL go up and down completely randomly.
Pair Corralation between Gruppo Mutuionline and SIMS METAL
Assuming the 90 days trading horizon Gruppo Mutuionline SpA is expected to generate 0.89 times more return on investment than SIMS METAL. However, Gruppo Mutuionline SpA is 1.12 times less risky than SIMS METAL. It trades about 0.19 of its potential returns per unit of risk. SIMS METAL MGT is currently generating about 0.04 per unit of risk. If you would invest 3,215 in Gruppo Mutuionline SpA on August 28, 2024 and sell it today you would earn a total of 530.00 from holding Gruppo Mutuionline SpA or generate 16.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gruppo Mutuionline SpA vs. SIMS METAL MGT
Performance |
| Timeline |
| Gruppo Mutuionline SpA |
| SIMS METAL MGT |
Gruppo Mutuionline and SIMS METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gruppo Mutuionline and SIMS METAL
The main advantage of trading using opposite Gruppo Mutuionline and SIMS METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gruppo Mutuionline 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.| Gruppo Mutuionline vs. Solstad Offshore ASA | Gruppo Mutuionline vs. SIEM OFFSHORE NEW | Gruppo Mutuionline vs. SOLSTAD OFFSHORE NK | Gruppo Mutuionline vs. Verizon Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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