Correlation Between INSURANCE AUST and SIMS METAL
Can any of the company-specific risk be diversified away by investing in both INSURANCE AUST 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 INSURANCE AUST and SIMS METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSURANCE AUST GRP and SIMS METAL MGT, you can compare the effects of market volatilities on INSURANCE AUST 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 INSURANCE AUST with a short position of SIMS METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSURANCE AUST and SIMS METAL.
Diversification Opportunities for INSURANCE AUST and SIMS METAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INSURANCE and SIMS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INSURANCE AUST GRP 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 INSURANCE AUST 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 INSURANCE AUST GRP 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 INSURANCE AUST i.e., INSURANCE AUST and SIMS METAL go up and down completely randomly.
Pair Corralation between INSURANCE AUST and SIMS METAL
If you would invest (100.00) in SIMS METAL MGT on January 17, 2025 and sell it today you would earn a total of 100.00 from holding SIMS METAL MGT or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
INSURANCE AUST GRP vs. SIMS METAL MGT
Performance |
| Timeline |
| INSURANCE AUST GRP |
| SIMS METAL MGT |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
INSURANCE AUST and SIMS METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSURANCE AUST and SIMS METAL
The main advantage of trading using opposite INSURANCE AUST and SIMS METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSURANCE AUST 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.| INSURANCE AUST vs. TOREX SEMICONDUCTOR LTD | INSURANCE AUST vs. Urban Outfitters | INSURANCE AUST vs. CAIRN HOMES EO | INSURANCE AUST vs. Focus Home Interactive |
| SIMS METAL vs. BOVIS HOMES GROUP | SIMS METAL vs. KENEDIX OFFICE INV | SIMS METAL vs. De Grey Mining | SIMS METAL vs. ANGLO ASIAN MINING |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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