Correlation Between MYR and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both MYR 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 MYR and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYR Group and Grupo Simec SAB, you can compare the effects of market volatilities on MYR 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 MYR with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYR and Grupo Simec.
Diversification Opportunities for MYR and Grupo Simec
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MYR and Grupo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding MYR 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 MYR 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 MYR 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 MYR i.e., MYR and Grupo Simec go up and down completely randomly.
Pair Corralation between MYR and Grupo Simec
Given the investment horizon of 90 days MYR Group is expected to generate 1.48 times more return on investment than Grupo Simec. However, MYR is 1.48 times more volatile than Grupo Simec SAB. It trades about 0.4 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.11 per unit of risk. If you would invest 11,676 in MYR Group on August 27, 2024 and sell it today you would earn a total of 4,291 from holding MYR Group or generate 36.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MYR Group vs. Grupo Simec SAB
Performance |
| Timeline |
| MYR Group |
| Grupo Simec SAB |
MYR and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYR and Grupo Simec
The main advantage of trading using opposite MYR and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYR 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.The idea behind MYR Group and Grupo Simec SAB pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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