Correlation Between SIMS METAL and KBC Ancora

Can any of the company-specific risk be diversified away by investing in both SIMS METAL and KBC Ancora 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 SIMS METAL and KBC Ancora into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SIMS METAL MGT and KBC Ancora SCA, you can compare the effects of market volatilities on SIMS METAL and KBC Ancora 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 SIMS METAL with a short position of KBC Ancora. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMS METAL and KBC Ancora.

Diversification Opportunities for SIMS METAL and KBC Ancora

0.47

Correlation Coefficient

SIMS METAL  KBC Ancora

Very weak diversification

The 3 months correlation between SIMS and KBC is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding SIMS METAL MGT and KBC Ancora SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC Ancora SCA and SIMS METAL 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 SIMS METAL MGT are associated (or correlated) with KBC Ancora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC Ancora SCA has no effect on the direction of SIMS METAL i.e., SIMS METAL and KBC Ancora go up and down completely randomly.

Pair Corralation between SIMS METAL and KBC Ancora

Assuming the 90 days trading horizon SIMS METAL MGT is expected to generate 1.24 times more return on investment than KBC Ancora. However, SIMS METAL is 1.24 times more volatile than KBC Ancora SCA. It trades about 0.14 of its potential returns per unit of risk. KBC Ancora SCA is currently generating about 0.17 per unit of risk. If you would invest  800.00  in SIMS METAL MGT on April 24, 2025 and sell it today you would earn a total of  110.00  from holding SIMS METAL MGT or generate 13.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

SIMS METAL MGT  vs.  KBC Ancora SCA

SIMS METAL MGT

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SIMS METAL MGT are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, SIMS METAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

KBC Ancora SCA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC Ancora SCA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KBC Ancora reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIMS METAL and KBC Ancora

The main advantage of trading using opposite SIMS METAL and KBC Ancora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMS METAL position performs unexpectedly, KBC Ancora 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 KBC Ancora will offset losses from the drop in KBC Ancora's long position.

The idea behind SIMS METAL MGT and KBC Ancora SCA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.