Correlation Between Park Ohio and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Park Ohio 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 Park Ohio and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Park Ohio Holdings and Grupo Simec SAB, you can compare the effects of market volatilities on Park Ohio 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 Park Ohio with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Park Ohio and Grupo Simec.
Diversification Opportunities for Park Ohio and Grupo Simec
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Park and Grupo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Park Ohio 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 Park Ohio 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 Park Ohio 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 Park Ohio i.e., Park Ohio and Grupo Simec go up and down completely randomly.
Pair Corralation between Park Ohio and Grupo Simec
Given the investment horizon of 90 days Park Ohio Holdings is expected to generate 1.93 times more return on investment than Grupo Simec. However, Park Ohio is 1.93 times more volatile than Grupo Simec SAB. It trades about 0.11 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 2,962 in Park Ohio Holdings on August 31, 2024 and sell it today you would earn a total of 242.00 from holding Park Ohio Holdings or generate 8.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Park Ohio Holdings vs. Grupo Simec SAB
Performance |
| Timeline |
| Park Ohio Holdings |
| Grupo Simec SAB |
Park Ohio and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Park Ohio and Grupo Simec
The main advantage of trading using opposite Park Ohio and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Park Ohio 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.| Park Ohio vs. Hurco Companies | Park Ohio vs. Enerpac Tool Group | Park Ohio vs. China Yuchai International | Park Ohio vs. Luxfer Holdings PLC |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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