Correlation Between Sims Metal and I3 Verticals

Can any of the company-specific risk be diversified away by investing in both Sims Metal and I3 Verticals 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 I3 Verticals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sims Metal Management and i3 Verticals, you can compare the effects of market volatilities on Sims Metal and I3 Verticals 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 I3 Verticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and I3 Verticals.

Diversification Opportunities for Sims Metal and I3 Verticals

0.0

Correlation Coefficient

Sims Metal  I3 Verticals

Pay attention - limited upside

The 3 months correlation between Sims and IIIV is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and i3 Verticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on i3 Verticals 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 Management are associated (or correlated) with I3 Verticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of i3 Verticals has no effect on the direction of Sims Metal i.e., Sims Metal and I3 Verticals go up and down completely randomly.

Pair Corralation between Sims Metal and I3 Verticals

If you would invest  2,675  in i3 Verticals on May 14, 2025 and sell it today you would earn a total of  536.00  from holding i3 Verticals or generate 20.04% return on investment over 90 days.

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

Sims Metal Management  vs.  i3 Verticals

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.

i3 Verticals

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in i3 Verticals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward indicators, I3 Verticals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sims Metal and I3 Verticals

The main advantage of trading using opposite Sims Metal and I3 Verticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims Metal position performs unexpectedly, I3 Verticals 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 I3 Verticals will offset losses from the drop in I3 Verticals' long position.

The idea behind Sims Metal Management and i3 Verticals 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.