Correlation Between Sims Metal and Scisparc

Can any of the company-specific risk be diversified away by investing in both Sims Metal and Scisparc 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 Scisparc 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 Scisparc, you can compare the effects of market volatilities on Sims Metal and Scisparc 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 Scisparc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims Metal and Scisparc.

Diversification Opportunities for Sims Metal and Scisparc

-0.74

Correlation Coefficient

Sims Metal  Scisparc

Pay attention - limited upside

The 3 months correlation between Sims and Scisparc is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Sims Metal Management and Scisparc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scisparc 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 Scisparc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scisparc has no effect on the direction of Sims Metal i.e., Sims Metal and Scisparc go up and down completely randomly.

Pair Corralation between Sims Metal and Scisparc

Assuming the 90 days horizon Sims Metal Management is expected to generate 0.17 times more return on investment than Scisparc. However, Sims Metal Management is 5.78 times less risky than Scisparc. It trades about 0.1 of its potential returns per unit of risk. Scisparc is currently generating about -0.01 per unit of risk. If you would invest  963.00  in Sims Metal Management on September 17, 2025 and sell it today you would earn a total of  242.00  from holding Sims Metal Management or generate 25.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	75.81%
Values	Daily Returns

Sims Metal Management  vs.  Scisparc

Sims Metal Management

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sims Metal Management are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile primary indicators, Sims Metal showed solid returns over the last few months and may actually be approaching a breakup point.

Scisparc

Risk-Adjusted Performance

Weakest

Over the last 90 days Scisparc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2026. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Sims Metal and Scisparc

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

The idea behind Sims Metal Management and Scisparc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.