Correlation Between Western Asset and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Investment and Grupo Simec SAB, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Grupo Simec.
Diversification Opportunities for Western Asset and Grupo Simec
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Western and Grupo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Investment 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 Western Asset 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 Western Asset Investment 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 Western Asset i.e., Western Asset and Grupo Simec go up and down completely randomly.
Pair Corralation between Western Asset and Grupo Simec
Considering the 90-day investment horizon Western Asset Investment is expected to under-perform the Grupo Simec. But the stock apears to be less risky and, when comparing its historical volatility, Western Asset Investment is 4.15 times less risky than Grupo Simec. The stock trades about -0.02 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 2,549 in Grupo Simec SAB on August 30, 2024 and sell it today you would earn a total of 51.00 from holding Grupo Simec SAB or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Investment vs. Grupo Simec SAB
Performance |
| Timeline |
| Western Asset Investment |
| Grupo Simec SAB |
Western Asset and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Grupo Simec
The main advantage of trading using opposite Western Asset and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. ClimateRock Class A | Western Asset vs. CF Acquisition VII | Western Asset vs. DP Cap Acquisition |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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