Correlation Between NI Holdings and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both NI Holdings 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 NI Holdings and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NI Holdings and Grupo Simec SAB, you can compare the effects of market volatilities on NI Holdings 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 NI Holdings with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of NI Holdings and Grupo Simec.
Diversification Opportunities for NI Holdings and Grupo Simec
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NODK and Grupo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding NI Holdings 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 NI Holdings 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 NI Holdings 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 NI Holdings i.e., NI Holdings and Grupo Simec go up and down completely randomly.
Pair Corralation between NI Holdings and Grupo Simec
Given the investment horizon of 90 days NI Holdings is expected to generate 0.3 times more return on investment than Grupo Simec. However, NI Holdings is 3.29 times less risky than Grupo Simec. It trades about 0.29 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about -0.06 per unit of risk. If you would invest 1,565 in NI Holdings on August 25, 2024 and sell it today you would earn a total of 105.00 from holding NI Holdings or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NI Holdings vs. Grupo Simec SAB
Performance |
| Timeline |
| NI Holdings |
| Grupo Simec SAB |
NI Holdings and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NI Holdings and Grupo Simec
The main advantage of trading using opposite NI Holdings and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NI Holdings 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.| NI Holdings vs. Horace Mann Educators | NI Holdings vs. Donegal Group A | NI Holdings vs. Global Indemnity PLC | NI Holdings vs. Selective Insurance Group |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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