Correlation Between Algoma Steel and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Algoma Steel 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 Algoma Steel and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Algoma Steel Group and Grupo Simec SAB, you can compare the effects of market volatilities on Algoma Steel 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 Algoma Steel with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Algoma Steel and Grupo Simec.
Diversification Opportunities for Algoma Steel and Grupo Simec
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Algoma and Grupo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Algoma Steel Group 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 Algoma Steel 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 Algoma Steel Group 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 Algoma Steel i.e., Algoma Steel and Grupo Simec go up and down completely randomly.
Pair Corralation between Algoma Steel and Grupo Simec
Given the investment horizon of 90 days Algoma Steel Group is expected to under-perform the Grupo Simec. But the stock apears to be less risky and, when comparing its historical volatility, Algoma Steel Group is 1.16 times less risky than Grupo Simec. The stock trades about -0.06 of its potential returns per unit of risk. The Grupo Simec SAB is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,749 in Grupo Simec SAB on November 2, 2024 and sell it today you would lose (211.00) from holding Grupo Simec SAB or give up 7.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.29% |
| Values | Daily Returns |
Algoma Steel Group vs. Grupo Simec SAB
Performance |
| Timeline |
| Algoma Steel Group |
| Grupo Simec SAB |
Algoma Steel and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Algoma Steel and Grupo Simec
The main advantage of trading using opposite Algoma Steel and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Algoma Steel 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.| Algoma Steel vs. Friedman Industries | Algoma Steel vs. ArcelorMittal SA | Algoma Steel vs. Aperam PK | Algoma Steel vs. Acerinox SA ADR |
| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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