Correlation Between Cumulus Media and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Cumulus Media 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 Cumulus Media and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumulus Media Class and Grupo Simec SAB, you can compare the effects of market volatilities on Cumulus Media 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 Cumulus Media with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and Grupo Simec.
Diversification Opportunities for Cumulus Media and Grupo Simec
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cumulus and Grupo is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class 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 Cumulus Media 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 Cumulus Media Class 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 Cumulus Media i.e., Cumulus Media and Grupo Simec go up and down completely randomly.
Pair Corralation between Cumulus Media and Grupo Simec
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the Grupo Simec. In addition to that, Cumulus Media is 2.32 times more volatile than Grupo Simec SAB. It trades about -0.15 of its total potential returns per unit of risk. Grupo Simec SAB is currently generating about 0.08 per unit of volatility. If you would invest 2,600 in Grupo Simec SAB on September 2, 2024 and sell it today you would earn a total of 89.00 from holding Grupo Simec SAB or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. Grupo Simec SAB
Performance |
| Timeline |
| Cumulus Media Class |
| Grupo Simec SAB |
Cumulus Media and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and Grupo Simec
The main advantage of trading using opposite Cumulus Media and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media 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.| Cumulus Media vs. E W Scripps | Cumulus Media vs. Gray Television | Cumulus Media vs. ProSiebenSat1 Media AG | Cumulus Media vs. RTL Group SA |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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