Correlation Between First Ship and Sims Metal
Can any of the company-specific risk be diversified away by investing in both First Ship 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 First Ship and Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Ship Lease and Sims Metal Management, you can compare the effects of market volatilities on First Ship 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 First Ship with a short position of Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Ship and Sims Metal.
Diversification Opportunities for First Ship and Sims Metal
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Sims is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Ship Lease 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 First Ship 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 First Ship Lease 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 First Ship i.e., First Ship and Sims Metal go up and down completely randomly.
Pair Corralation between First Ship and Sims Metal
If you would invest 1,030 in Sims Metal Management on January 20, 2024 and sell it today you would earn a total of 0.00 from holding Sims Metal Management or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
First Ship Lease vs. Sims Metal Management
Performance |
Timeline |
First Ship Lease |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sims Metal Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
First Ship and Sims Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Ship and Sims Metal
The main advantage of trading using opposite First Ship and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Ship 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.First Ship vs. Cirrus Logic | First Ship vs. Abcellera BiologicsInc | First Ship vs. Teradyne | First Ship vs. Regeneron Pharmaceuticals |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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