Correlation Between Alfa SAB and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Alfa SAB and Grupo Simec 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 Alfa SAB and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa SAB de and Grupo Simec SAB, you can compare the effects of market volatilities on Alfa SAB and Grupo Simec 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 Alfa SAB with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa SAB and Grupo Simec.
Diversification Opportunities for Alfa SAB and Grupo Simec
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alfa and Grupo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Alfa SAB de and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec SAB and Alfa SAB 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 Alfa SAB de are associated (or correlated) with Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of Alfa SAB i.e., Alfa SAB and Grupo Simec go up and down completely randomly.
Pair Corralation between Alfa SAB and Grupo Simec
Assuming the 90 days trading horizon Alfa SAB de is expected to generate 14.93 times more return on investment than Grupo Simec. However, Alfa SAB is 14.93 times more volatile than Grupo Simec SAB. It trades about 0.15 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about 0.0 per unit of risk. If you would invest 983.00 in Alfa SAB de on September 13, 2024 and sell it today you would earn a total of 569.00 from holding Alfa SAB de or generate 57.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa SAB de vs. Grupo Simec SAB
Performance |
| Timeline |
| Alfa SAB de |
| Grupo Simec SAB |
Alfa SAB and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa SAB and Grupo Simec
The main advantage of trading using opposite Alfa SAB and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa SAB position performs unexpectedly, Grupo Simec 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 Grupo Simec will offset losses from the drop in Grupo Simec's long position.| Alfa SAB vs. Grupo Financiero Inbursa | Alfa SAB vs. Kimberly Clark de Mxico | Alfa SAB vs. Grupo Televisa SAB | Alfa SAB vs. Grupo Bimbo SAB |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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