Correlation Between APA and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both APA 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 APA and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APA Corporation and Grupo Simec SAB, you can compare the effects of market volatilities on APA 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 APA with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of APA and Grupo Simec.
Diversification Opportunities for APA and Grupo Simec
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between APA and Grupo is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding APA Corp. 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 APA 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 APA Corporation 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 APA i.e., APA and Grupo Simec go up and down completely randomly.
Pair Corralation between APA and Grupo Simec
Assuming the 90 days trading horizon APA Corporation is expected to under-perform the Grupo Simec. But the stock apears to be less risky and, when comparing its historical volatility, APA Corporation is 1.09 times less risky than Grupo Simec. The stock trades about -0.15 of its potential returns per unit of risk. The Grupo Simec SAB is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 18,300 in Grupo Simec SAB on November 28, 2024 and sell it today you would lose (300.00) from holding Grupo Simec SAB or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APA Corp. vs. Grupo Simec SAB
Performance |
| Timeline |
| APA Corporation |
| Grupo Simec SAB |
APA and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APA and Grupo Simec
The main advantage of trading using opposite APA and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APA 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.| APA vs. Samsung Electronics Co | APA vs. Lloyds Banking Group | APA vs. Micron Technology | APA vs. First Republic Bank |
| Grupo Simec vs. KB Home | Grupo Simec vs. Southwest Airlines | Grupo Simec vs. Prudential Financial | Grupo Simec vs. Desarrolladora Homex SAB |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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