Correlation Between Simpson Manufacturing and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Simpson Manufacturing and Maanshan Iron 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 Simpson Manufacturing and Maanshan Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simpson Manufacturing and Maanshan Iron Steel, you can compare the effects of market volatilities on Simpson Manufacturing and Maanshan Iron 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 Simpson Manufacturing with a short position of Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simpson Manufacturing and Maanshan Iron.
Diversification Opportunities for Simpson Manufacturing and Maanshan Iron
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Simpson and Maanshan is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Simpson Manufacturing and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel and Simpson Manufacturing 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 Simpson Manufacturing are associated (or correlated) with Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Simpson Manufacturing i.e., Simpson Manufacturing and Maanshan Iron go up and down completely randomly.
Pair Corralation between Simpson Manufacturing and Maanshan Iron
Considering the 90-day investment horizon Simpson Manufacturing is expected to generate 0.49 times more return on investment than Maanshan Iron. However, Simpson Manufacturing is 2.05 times less risky than Maanshan Iron. It trades about 0.13 of its potential returns per unit of risk. Maanshan Iron Steel is currently generating about -0.22 per unit of risk. If you would invest 17,879 in Simpson Manufacturing on September 2, 2024 and sell it today you would earn a total of 961.00 from holding Simpson Manufacturing or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simpson Manufacturing vs. Maanshan Iron Steel
Performance |
| Timeline |
| Simpson Manufacturing |
| Maanshan Iron Steel |
Simpson Manufacturing and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simpson Manufacturing and Maanshan Iron
The main advantage of trading using opposite Simpson Manufacturing and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simpson Manufacturing position performs unexpectedly, Maanshan Iron 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 Maanshan Iron will offset losses from the drop in Maanshan Iron's long position.| Simpson Manufacturing vs. West Fraser Timber | Simpson Manufacturing vs. Interfor | Simpson Manufacturing vs. Ufp Industries | Simpson Manufacturing vs. Canfor |
| Maanshan Iron vs. ArcelorMittal SA ADR | Maanshan Iron vs. Gerdau SA ADR | Maanshan Iron vs. POSCO Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |