Correlation Between Grupo Simec and Cadence Design
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Cadence Design 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 Grupo Simec and Cadence Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Simec SAB and Cadence Design Systems, you can compare the effects of market volatilities on Grupo Simec and Cadence Design 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 Grupo Simec with a short position of Cadence Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Cadence Design.
Diversification Opportunities for Grupo Simec and Cadence Design
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grupo and Cadence is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Cadence Design Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Design Systems and Grupo Simec 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 Grupo Simec SAB are associated (or correlated) with Cadence Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Design Systems has no effect on the direction of Grupo Simec i.e., Grupo Simec and Cadence Design go up and down completely randomly.
Pair Corralation between Grupo Simec and Cadence Design
Considering the 90-day investment horizon Grupo Simec is expected to generate 9.21 times less return on investment than Cadence Design. In addition to that, Grupo Simec is 1.77 times more volatile than Cadence Design Systems. It trades about 0.0 of its total potential returns per unit of risk. Cadence Design Systems is currently generating about 0.08 per unit of volatility. If you would invest 16,223 in Cadence Design Systems on September 5, 2024 and sell it today you would earn a total of 15,102 from holding Cadence Design Systems or generate 93.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 88.28% |
| Values | Daily Returns |
Grupo Simec SAB vs. Cadence Design Systems
Performance |
| Timeline |
| Grupo Simec SAB |
| Cadence Design Systems |
Grupo Simec and Cadence Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Cadence Design
The main advantage of trading using opposite Grupo Simec and Cadence Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Cadence Design 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 Cadence Design will offset losses from the drop in Cadence Design's long position.| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
| Cadence Design vs. HeartCore Enterprises | Cadence Design vs. Beamr Imaging Ltd | Cadence Design vs. Trust Stamp | Cadence Design vs. CXApp Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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