Correlation Between SIMS METAL and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both SIMS METAL and Citic Telecom 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 Citic Telecom 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 Citic Telecom International, you can compare the effects of market volatilities on SIMS METAL and Citic Telecom 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 Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIMS METAL and Citic Telecom.
Diversification Opportunities for SIMS METAL and Citic Telecom
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between SIMS and Citic is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding SIMS METAL MGT and Citic Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Telecom Intern 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 Citic Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Telecom Intern has no effect on the direction of SIMS METAL i.e., SIMS METAL and Citic Telecom go up and down completely randomly.
Pair Corralation between SIMS METAL and Citic Telecom
Assuming the 90 days trading horizon SIMS METAL MGT is expected to generate 0.98 times more return on investment than Citic Telecom. However, SIMS METAL MGT is 1.02 times less risky than Citic Telecom. It trades about 0.16 of its potential returns per unit of risk. Citic Telecom International is currently generating about 0.04 per unit of risk. If you would invest 777.00 in SIMS METAL MGT on September 1, 2025 and sell it today you would earn a total of 183.00 from holding SIMS METAL MGT or generate 23.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIMS METAL MGT vs. Citic Telecom International
Performance |
| Timeline |
| SIMS METAL MGT |
| Citic Telecom Intern |
SIMS METAL and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIMS METAL and Citic Telecom
The main advantage of trading using opposite SIMS METAL and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIMS METAL position performs unexpectedly, Citic Telecom 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 Citic Telecom will offset losses from the drop in Citic Telecom's long position.| SIMS METAL vs. ANTA Sports Products | SIMS METAL vs. Transport International Holdings | SIMS METAL vs. USWE SPORTS AB | SIMS METAL vs. Columbia Sportswear |
| Citic Telecom vs. SENECA FOODS A | Citic Telecom vs. JAPAN AIRLINES | Citic Telecom vs. SOUTHWEST AIRLINES | Citic Telecom vs. Tyson Foods |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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