Correlation Between Cleveland Cliffs and Sims Metal

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

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

Diversification Opportunities for Cleveland Cliffs and Sims Metal

0.0

Correlation Coefficient

Cleveland Cliffs  Sims Metal

Pay attention - limited upside

The 3 months correlation between Cleveland and Sims is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cleveland Cliffs 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 Cleveland Cliffs 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 Cleveland Cliffs 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 Cleveland Cliffs i.e., Cleveland Cliffs and Sims Metal go up and down completely randomly.

Pair Corralation between Cleveland Cliffs and Sims Metal

If you would invest  742.00  in Cleveland Cliffs on May 20, 2025 and sell it today you would earn a total of  299.00  from holding Cleveland Cliffs or generate 40.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cleveland Cliffs  vs.  Sims Metal Management

Cleveland Cliffs

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cleveland Cliffs are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, Cleveland Cliffs reported solid returns over the last few months and may actually be approaching a breakup point.

Sims Metal Management

Risk-Adjusted Performance

Weakest

Over the last 90 days Sims Metal Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, Sims Metal is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cleveland Cliffs and Sims Metal

The main advantage of trading using opposite Cleveland Cliffs and Sims Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleveland Cliffs 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.

The idea behind Cleveland Cliffs and Sims Metal 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.