Correlation Between TIANDE CHEMICAL and Sims Metal
Can any of the company-specific risk be diversified away by investing in both TIANDE CHEMICAL 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 TIANDE CHEMICAL and Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIANDE CHEMICAL and Sims Metal Management, you can compare the effects of market volatilities on TIANDE CHEMICAL 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 TIANDE CHEMICAL with a short position of Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIANDE CHEMICAL and Sims Metal.
Diversification Opportunities for TIANDE CHEMICAL and Sims Metal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TIANDE and Sims is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL i.e., TIANDE CHEMICAL and Sims Metal go up and down completely randomly.
Pair Corralation between TIANDE CHEMICAL and Sims Metal
Assuming the 90 days trading horizon TIANDE CHEMICAL is expected to generate 1.09 times more return on investment than Sims Metal. However, TIANDE CHEMICAL is 1.09 times more volatile than Sims Metal Management. It trades about 0.07 of its potential returns per unit of risk. Sims Metal Management is currently generating about 0.04 per unit of risk. If you would invest 5.25 in TIANDE CHEMICAL on January 11, 2025 and sell it today you would earn a total of 2.00 from holding TIANDE CHEMICAL or generate 38.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TIANDE CHEMICAL vs. Sims Metal Management
Performance |
| Timeline |
| TIANDE CHEMICAL |
| Sims Metal Management |
TIANDE CHEMICAL and Sims Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIANDE CHEMICAL and Sims Metal
The main advantage of trading using opposite TIANDE CHEMICAL and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE CHEMICAL 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.| TIANDE CHEMICAL vs. MeVis Medical Solutions | TIANDE CHEMICAL vs. Luckin Coffee | TIANDE CHEMICAL vs. Ares Management Corp | TIANDE CHEMICAL vs. Value Management Research |
| Sims Metal vs. Upland Software | Sims Metal vs. ACCSYS TECHPLC EO | Sims Metal vs. Global Ship Lease | Sims Metal vs. GLG LIFE TECH |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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