Correlation Between Owens Corning and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Owens Corning 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 Owens Corning and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Owens Corning and Grupo Simec SAB, you can compare the effects of market volatilities on Owens Corning 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 Owens Corning with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Owens Corning and Grupo Simec.
Diversification Opportunities for Owens Corning and Grupo Simec
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Owens and Grupo is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Owens Corning 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 Owens Corning 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 Owens Corning 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 Owens Corning i.e., Owens Corning and Grupo Simec go up and down completely randomly.
Pair Corralation between Owens Corning and Grupo Simec
Allowing for the 90-day total investment horizon Owens Corning is expected to generate 0.62 times more return on investment than Grupo Simec. However, Owens Corning is 1.61 times less risky than Grupo Simec. It trades about 0.38 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 18,505 in Owens Corning on August 27, 2024 and sell it today you would earn a total of 2,576 from holding Owens Corning or generate 13.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Owens Corning vs. Grupo Simec SAB
Performance |
| Timeline |
| Owens Corning |
| Grupo Simec SAB |
Owens Corning and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Owens Corning and Grupo Simec
The main advantage of trading using opposite Owens Corning and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Owens Corning 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.| Owens Corning vs. Trex Company | Owens Corning vs. Gibraltar Industries | Owens Corning vs. Travis Perkins PLC | Owens Corning vs. Janus International 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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