Correlation Between SUN ART and SIMS METAL
Can any of the company-specific risk be diversified away by investing in both SUN ART 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 SUN ART and SIMS METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUN ART RETAIL and SIMS METAL MGT, you can compare the effects of market volatilities on SUN ART 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 SUN ART with a short position of SIMS METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and SIMS METAL.
Diversification Opportunities for SUN ART and SIMS METAL
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SUN and SIMS is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL 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 SUN ART 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 SUN ART RETAIL 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 SUN ART i.e., SUN ART and SIMS METAL go up and down completely randomly.
Pair Corralation between SUN ART and SIMS METAL
Assuming the 90 days trading horizon SUN ART RETAIL is expected to generate 2.42 times more return on investment than SIMS METAL. However, SUN ART is 2.42 times more volatile than SIMS METAL MGT. It trades about 0.09 of its potential returns per unit of risk. SIMS METAL MGT is currently generating about 0.16 per unit of risk. If you would invest 21.00 in SUN ART RETAIL on April 25, 2025 and sell it today you would earn a total of 4.00 from holding SUN ART RETAIL or generate 19.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SUN ART RETAIL vs. SIMS METAL MGT
Performance |
Timeline |
SUN ART RETAIL |
SIMS METAL MGT |
SUN ART and SIMS METAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SUN ART and SIMS METAL
The main advantage of trading using opposite SUN ART and SIMS METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN ART 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.SUN ART vs. Geely Automobile Holdings | SUN ART vs. Richardson Electronics | SUN ART vs. Japan Tobacco | SUN ART vs. METHODE ELECTRONICS |
SIMS METAL vs. GREENX METALS LTD | SIMS METAL vs. Perseus Mining Limited | SIMS METAL vs. Western Copper and | SIMS METAL vs. Hellenic Telecommunications Organization |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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