Correlation Between Lend Lease and Sims Metal
Can any of the company-specific risk be diversified away by investing in both Lend Lease 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 Lend Lease and Sims Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lend Lease Group and Sims Metal Management, you can compare the effects of market volatilities on Lend Lease 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 Lend Lease with a short position of Sims Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lend Lease and Sims Metal.
Diversification Opportunities for Lend Lease and Sims Metal
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lend and Sims is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lend Lease Group 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 Lend Lease 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 Lend Lease Group 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 Lend Lease i.e., Lend Lease and Sims Metal go up and down completely randomly.
Pair Corralation between Lend Lease 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 | Moves Against |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Lend Lease Group vs. Sims Metal Management
Performance |
Timeline |
Lend Lease Group |
Sims Metal Management |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lend Lease and Sims Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lend Lease and Sims Metal
The main advantage of trading using opposite Lend Lease and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lend Lease 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.Lend Lease vs. Comstock Holding Companies | Lend Lease vs. St Joe Company | Lend Lease vs. Stratus Properties | Lend Lease vs. HUMANA INC |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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