Correlation Between Industrias and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Industrias 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 Industrias and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrias CH S and Grupo Simec SAB, you can compare the effects of market volatilities on Industrias 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 Industrias with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrias and Grupo Simec.
Diversification Opportunities for Industrias and Grupo Simec
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Industrias and Grupo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Industrias CH S 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 Industrias 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 Industrias CH S 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 Industrias i.e., Industrias and Grupo Simec go up and down completely randomly.
Pair Corralation between Industrias and Grupo Simec
Assuming the 90 days trading horizon Industrias CH S is expected to generate 1.28 times more return on investment than Grupo Simec. However, Industrias is 1.28 times more volatile than Grupo Simec SAB. It trades about -0.01 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.01 per unit of risk. If you would invest 19,900 in Industrias CH S on August 27, 2024 and sell it today you would lose (1,401) from holding Industrias CH S or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Industrias CH S vs. Grupo Simec SAB
Performance |
| Timeline |
| Industrias CH S |
| Grupo Simec SAB |
Industrias and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrias and Grupo Simec
The main advantage of trading using opposite Industrias and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrias 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.| Industrias vs. Grupo Simec SAB | Industrias vs. Grupo Financiero Inbursa | Industrias vs. Grupo Aeroportuario del | Industrias vs. Kimberly Clark de Mxico |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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