Correlation Between Pool and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both Pool 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 Pool and Grupo Simec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pool Corporation and Grupo Simec SAB, you can compare the effects of market volatilities on Pool 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 Pool with a short position of Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and Grupo Simec.
Diversification Opportunities for Pool and Grupo Simec
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pool and Grupo is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pool 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 Pool 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 Pool Corporation 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 Pool i.e., Pool and Grupo Simec go up and down completely randomly.
Pair Corralation between Pool and Grupo Simec
Given the investment horizon of 90 days Pool Corporation is expected to generate 0.57 times more return on investment than Grupo Simec. However, Pool Corporation is 1.75 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 0.0 per unit of risk. If you would invest 32,281 in Pool Corporation on August 30, 2024 and sell it today you would earn a total of 5,402 from holding Pool Corporation or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.48% |
| Values | Daily Returns |
Pool Corp. vs. Grupo Simec SAB
Performance |
| Timeline |
| Pool |
| Grupo Simec SAB |
Pool and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pool and Grupo Simec
The main advantage of trading using opposite Pool and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pool 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 Pool Corporation 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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