Correlation Between Sims Metal and Gex Management

Can any of the company-specific risk be diversified away by investing in both Sims Metal and Gex Management 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 Gex Management into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sims Metal Management and Gex Management, you can compare the effects of market volatilities on Sims Metal and Gex Management 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 Gex Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and Gex Management.

Diversification Opportunities for Sims Metal and Gex Management

0.0

Correlation Coefficient

Sims Metal  Gex Management

Pay attention - limited upside

The 3 months correlation between Sims and Gex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and Gex Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gex Management 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 Management are associated (or correlated) with Gex Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gex Management has no effect on the direction of Sims Metal i.e., Sims Metal and Gex Management go up and down completely randomly.

Pair Corralation between Sims Metal and Gex Management

If you would invest  915.00  in Sims Metal Management on September 9, 2025 and sell it today you would earn a total of  242.00  from holding Sims Metal Management or generate 26.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	89.06%
Values	Daily Returns

Sims Metal Management  vs.  Gex Management

Sims Metal Management

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sims Metal Management are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Sims Metal showed solid returns over the last few months and may actually be approaching a breakup point.

Gex Management

Risk-Adjusted Performance

Weakest

Over the last 90 days Gex Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Gex Management is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sims Metal and Gex Management

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

The idea behind Sims Metal Management and Gex Management 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 Channel module to use Commodity Channel Index to analyze current equity momentum.