Correlation Between New York and SIMS METAL
Can any of the company-specific risk be diversified away by investing in both New York 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 New York and SIMS METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The New York and SIMS METAL MGT, you can compare the effects of market volatilities on New York 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 New York with a short position of SIMS METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and SIMS METAL.
Diversification Opportunities for New York and SIMS METAL
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and SIMS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding The New York 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 New York 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 The New York 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 New York i.e., New York and SIMS METAL go up and down completely randomly.
Pair Corralation between New York and SIMS METAL
Assuming the 90 days horizon New York is expected to generate 8.45 times less return on investment than SIMS METAL. But when comparing it to its historical volatility, The New York is 1.12 times less risky than SIMS METAL. It trades about 0.01 of its potential returns per unit of risk. SIMS METAL MGT is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 765.00 in SIMS METAL MGT on September 1, 2024 and sell it today you would earn a total of 45.00 from holding SIMS METAL MGT or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The New York vs. SIMS METAL MGT
Performance |
| Timeline |
| New York |
| SIMS METAL MGT |
New York and SIMS METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and SIMS METAL
The main advantage of trading using opposite New York and SIMS METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York 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.| New York vs. SIMS METAL MGT | New York vs. Verizon Communications | New York vs. POWER METALS | New York vs. Citic Telecom International |
| SIMS METAL vs. Martin Marietta Materials | SIMS METAL vs. Hyster Yale Materials Handling | SIMS METAL vs. Plastic Omnium | SIMS METAL vs. MGIC 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
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |