Correlation Between Grupo Simec and Cleveland Cliffs
Can any of the company-specific risk be diversified away by investing in both Grupo Simec and Cleveland Cliffs 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 Cleveland Cliffs 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 Cleveland Cliffs, you can compare the effects of market volatilities on Grupo Simec and Cleveland Cliffs 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 Cleveland Cliffs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Simec and Cleveland Cliffs.
Diversification Opportunities for Grupo Simec and Cleveland Cliffs
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grupo and Cleveland is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Simec SAB and Cleveland Cliffs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleveland Cliffs 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 Cleveland Cliffs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleveland Cliffs has no effect on the direction of Grupo Simec i.e., Grupo Simec and Cleveland Cliffs go up and down completely randomly.
Pair Corralation between Grupo Simec and Cleveland Cliffs
Considering the 90-day investment horizon Grupo Simec SAB is expected to generate 0.72 times more return on investment than Cleveland Cliffs. However, Grupo Simec SAB is 1.39 times less risky than Cleveland Cliffs. It trades about 0.1 of its potential returns per unit of risk. Cleveland Cliffs is currently generating about -0.09 per unit of risk. If you would invest 2,650 in Grupo Simec SAB on September 12, 2024 and sell it today you would earn a total of 106.00 from holding Grupo Simec SAB or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Simec SAB vs. Cleveland Cliffs
Performance |
| Timeline |
| Grupo Simec SAB |
| Cleveland Cliffs |
Grupo Simec and Cleveland Cliffs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Simec and Cleveland Cliffs
The main advantage of trading using opposite Grupo Simec and Cleveland Cliffs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Simec position performs unexpectedly, Cleveland Cliffs 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 Cleveland Cliffs will offset losses from the drop in Cleveland Cliffs' long position.| Grupo Simec vs. Nucor Corp | Grupo Simec vs. Steel Dynamics | Grupo Simec vs. ArcelorMittal SA ADR | Grupo Simec vs. Gerdau SA ADR |
| Cleveland Cliffs vs. Nucor Corp | Cleveland Cliffs vs. Steel Dynamics | Cleveland Cliffs vs. ArcelorMittal SA ADR | Cleveland Cliffs 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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