Correlation Between Nucor Corp and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Nucor Corp 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 Nucor Corp and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nucor Corp and Grupo Simec SAB, you can compare the effects of market volatilities on Nucor Corp 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 Nucor Corp with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nucor Corp and Grupo Simec.
Diversification Opportunities for Nucor Corp and Grupo Simec
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nucor and Grupo is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nucor Corp 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 Nucor Corp 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 Nucor Corp 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 Nucor Corp i.e., Nucor Corp and Grupo Simec go up and down completely randomly.
Pair Corralation between Nucor Corp and Grupo Simec
Considering the 90-day investment horizon Nucor Corp is expected to generate 0.59 times more return on investment than Grupo Simec. However, Nucor Corp is 1.7 times less risky than Grupo Simec. It trades about 0.03 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 13,748 in Nucor Corp on August 31, 2024 and sell it today you would earn a total of 1,729 from holding Nucor Corp or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.53% |
| Values | Daily Returns |
Nucor Corp vs. Grupo Simec SAB
Performance |
| Timeline |
| Nucor Corp |
| Grupo Simec SAB |
Nucor Corp and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nucor Corp and Grupo Simec
The main advantage of trading using opposite Nucor Corp and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nucor Corp 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.| Nucor Corp vs. United States Steel | Nucor Corp vs. Reliance Steel Aluminum | Nucor Corp vs. ArcelorMittal SA ADR | Nucor Corp vs. Commercial Metals |
| Grupo Simec vs. Nucor Corp | Grupo Simec vs. Steel Dynamics | Grupo Simec vs. ArcelorMittal SA ADR | Grupo Simec vs. Gerdau SA ADR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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